How Do You Insure Funds More Than the FDIC Limit?

Bank failures are rare, but it's smart to take precautions to make sure your bank deposits are fully protected.

Insured banksDeposit insurance is a measure implemented in many countries to protect bank depositors, in full or in part, from losses caused by a bank's inability to pay its debts when due. Deposit insurance systems are one component of a broader financial system safety net that includes lender of last resort facilities, government guarantees, and other forms of insurance.There are two main types of deposit insurance:1. Insured banks – where each bank account holder is insured up to a certain limit set by the government.2. Uninsured banks – where account holders are not protected by the government and may lose some or all of their deposits if the bank fails.

How does FDIC coverage work?The FDIC is an independent agency of the United States government that protects the money you deposit in banks and savings associations in the event of their failure.All FDIC-insured banks and savings associations must display the official FDIC sign at each teller station, customer service representative desk, and new account desk in their lobby.The FDIC provides deposit insurance up to $250,000 per depositor, per insured bank, for each account ownership category.

$250,000 per depositor is insured for each ownership category at each institution.

For example,This is how it works:

You and your spouse have individual savings accounts at the same bank, each with $200,000 deposited. You're only insured up to $250,000 because both of your accounts have the same depositor, ownership category and institution.

A neobank is a type of financial institution that offers banking services without having a physical branch. Neobanks use technology to provide a digital experience for their customers.What is a neobank?A neobank is a financial institution that offers banking services without having a physical branch. Neobanks use technology to provide a digital experience for their customers.

Some consumers may find neobanks to be an attractive banking option.

Ellen Chang
March 10, 2023

"Most people expect" that the $250,000 limit for FDIC coverage applies to living trusts "per grantor," says Stephen Reh, a financial advisor at Reh Wealth Advisors in San Dimas, California. But it's actually calculated "per beneficiary."

For example, if two spouses have two children and each parent has set up a trust for each child, coverage would extend to $2 million. The math is: $250,000 from the father for Child 1 + $250,000 from the mother for Child 1 = $500,000 for Child 1; and $250,000 from the father for Child 2 + $250,000 from the mother for Child 2 = $500,000 for Child 2.

The FDIC Electronic Deposit Insurance Estimator, or "Edie," can tell you if your accounts are fully insured.

You can insure more than $250,000 by using a life insurance policy. This type of policy will pay out a death benefit to your beneficiaries if you die.

Although the $250,000 limit may sound high, there are some common situations in which you may have more cash in a bank, such as if:

You sold your home. You're saving up to buy a new one. You received an inheritance. You own a business. You sold a business. You're repositioning investments before retirement. You're retired. You have trust accounts.

• Use a joint account: You can add another person to your account, which will double the amount of money that is insured.
• Get a certificate of deposit: This is a type of account that has a set term, during which you cannot access your money. In exchange, the bank often offers a higher interest rate.
• Use a retirement account: Accounts such as a 401(k) or an IRA are insured up to $250,000.
• Get private insurance: You can work with a private company to insure your deposits for an additional fee.There are four ways to insure deposits of more than $250,000: using a joint account, getting a certificate of deposit, using a retirement account, or getting private insurance.

You can insure your deposits by spreading them among different ownership categories and FDIC-insured institutions. To further protect your money, consider using a network like IntraFi Network Deposits, which offers FDIC insurance on large sums by dividing them into smaller deposits at different banks. You may have to pay a fee for this service. Another option is to open a brokerage deposit account, which is also FDIC-insured.

Most large brokerage companies offer bank accounts that are FDIC-insured.

"A FDIC brokerage cash account is a great way to keep your money federally insured. You can also easily execute trades into the market through a brokerage house," says Elliot J. Pepper, co-founder and certified financial planner at Northbrook Financial in Baltimore.

The Securities Investor Protection Corp. (SIPC) protects securities customers of its member firms in the event of the member firm's bankruptcy. SIPC does not protect against losses from declines in the market value of securities, nor does it insure against losses due to poor investment decisions.

According to Chris Struckhoff, financial planner at Creative Planning in Irvine, California, most brokerage accounts will offer additional coverage.

Private banking is a banking service provided by banks to high net worth individuals. It is a type of wealth management, and provides personalized financial and investment advice to clients. Private banks also offer other services such as loans, mortgages, and credit products.What are the benefits of private banking?Private banking can provide a higher level of customer service than what is typically offered by banks to the general public. Private bankers are typically more knowledgeable about the financial needs of high net worth individuals, and can offer more tailored advice and products. In addition, private banks often have relationships with other wealth management professionals, such as financial planners and investment advisers, which can be beneficial to clients.

If you have a lot of money to manage, you might want individualized service.

Feb. 8, 2023 Casey Bond

When you're making a financial decision, it's important to think about where your money is going. You should ask yourself if the investment is worth the risk and if it aligns with your financial goals. It's also important to research the company or individual you're giving your money to. Make sure you understand what you're investing in and that you're comfortable with the amount of risk involved.It's important to consider where you're putting your money when you're making a financial decision. You should ask yourself if the investment is worth the risk and if it aligns with your financial goals. It's also important to research the company or individual you're giving your money to. Make sure you understand what you're investing in and that you're comfortable with the amount of risk involved.

FDIC-insured accounts are a safe way to keep your money, but they typically don't offer much in terms of interest. If you're looking for a higher return, you may want to consider investment opportunities that come with less safety but the potential for a larger reward.

1. Invest in a 529 planA 529 plan is a college savings plan that offers tax and financial aid advantages.2. Create a budget and stick to itBudgeting may not be the most exciting thing in the world, but it is essential to maintaining your financial health.3. Build up your emergency fundAn emergency fund is a key component of financial security. It can help you cover unexpected expenses without going into debt.4. Invest in yourselfInvesting in your own education and career development can pay off in the form of higher earnings and greater job satisfaction.5. Make a plan for your debtIf you have debt, it is important to develop a plan for paying it off. This can help you get out of debt more quickly and avoid costly interest charges.Here are five money moves that you will be thankful for:1. Invest in a 529 plan: A 529 plan is a college savings plan that offers tax and financial aid advantages.2. Create a budget and stick to it: Budgeting may not be the most exciting thing in the world, but it is essential to maintaining your financial health.3. Build up your emergency fund: An emergency fund is a key component of financial security. It can help you cover unexpected expenses without going into debt.4. Invest in yourself: Investing in your own education and career development can pay off in the form of higher earnings and greater job satisfaction.5. Make a plan for your debt: If you have debt, it is important to develop a plan for paying it off. This can help you get out of debt more quickly and avoid costly interest charges.

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