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Are you saying if I deposit more than $250k (which is NOT a lot for a business) into a reputable and regulated US bank at negligible rates of interest I should

Are you saying if I deposit more than $250k (which is NOT a lot for a business) into a reputable and regulated US bank at negligible rates of interest I should just accept the impact of the bank shutting down due to events unrelated to my actions and choices? Yes. That's the way this works. Or you can choose whatever risk mitigation strategy you're comfortable with: spread your deposits across multiple institutions, buy Krugerrands and bury them in the backyard, purchase 3rd party insurance whatever.

DennisP 4y ago
People keep talking about buying third-party insurance for this but a quick google didn't turn up any mention of insurance like that. Could you link some?
- IncRnd 4y ago
  That's very odd, the entire first page was full of hits for me. What were you searching? Take a look at https://www.forbes.com/advisor/banking/ways-to-insure-excess-deposits/ https://www.forbes.com/advisor/banking/ways-to-insure-excess.... It explains several methods, including extra deposit insurance from CDARS, MaxSafe, Depositors Insurance Fund, etc. It also explains cash management accounts, credit union overflow, using multiple banks, and so forth. I can't help but think a good CFO or comptroller would be well aware of these.
  - DennisP 4y ago
    Yes, I'm aware that I can put money in multiple accounts, or get an account that spreads the money to multiple accounts for me. None of these are what I was responding to: the suggestion to "purchase 3rd party insurance." The closest in that article is DIF but even that isn't insurance you go and buy, it's another kind of special bank account available at DIF's member banks. As far as I can tell, you can't just go buy supplemental deposit insurance, but for some reason people keep suggesting that as something SVB's depositors should have done. (And as someone who's worked as the first employee of a startup, I can tell you it was while before we were able to get a CFO.)
    - IncRnd 4y ago
      You can purchase DIF, when the account is at a participating bank. SVB chose not to participate in that non-FDIC program. However, SVB knew all about the program, even commenting on FDIC rule changes for it over a decade ago. [1] Ultimately, people will have to accept that SVB wasn't as trustworthy of a guardian as some other banks. It appears that people were pushed into using SVB, because it was part of the VC ecosystem. It's an individual CFO or Founder's decision as to whether to insure deposits or not, but claiming ignorance of the possibility is going to be ignored by a lot of others. [1] fdic.gov/resources/regulations/federal-register-publications/2010/10c20ad66rates.pdf
      - DennisP 4y ago
        I mentioned DIF above, and as I said there, it's not third-party insurance that you can go purchase. What you can do is get certain accounts that automatically include it for free: https://www.difxs.com/DIF/Home.aspx https://www.difxs.com/DIF/Home.aspx Here is the complete list of DIF-covered banks: https://www.difxs.com/DIF/DIFmemberbanks.aspx https://www.difxs.com/DIF/DIFmemberbanks.aspx It's a short list, they're small banks, and they all have addresses in Massachusetts. Wells Fargo and Bank of America, for example, are not on the list.
        IncRnd 4y ago
        If you have an account in need of insurance in excess of the FDIC limits, you can speak with your CFO about depositor bonds or contact the appropriate party about any of the other methods in the links that were posted in this thread.
        DennisP 4y ago
        Unless you have a link for these depositor bonds, I'll remain skeptical since they weren't mentioned in your previous link, google produces nothing obvious and DIF isn't at all what you'd claimed.
        4y ago
- JohnFen 4y ago
  If you are serious about looking for solutions, you really need to consult a financial advisor who specializes in these sorts of things. They'll know where to find insurance. They'll also know of a variety of other mitigation strategies that might be better than insurance for your particular situation.

DennisP 4y ago

People keep talking about buying third-party insurance for this but a quick google didn't turn up any mention of insurance like that. Could you link some?

IncRnd 4y ago
That's very odd, the entire first page was full of hits for me. What were you searching? Take a look at https://www.forbes.com/advisor/banking/ways-to-insure-excess-deposits/ https://www.forbes.com/advisor/banking/ways-to-insure-excess.... It explains several methods, including extra deposit insurance from CDARS, MaxSafe, Depositors Insurance Fund, etc. It also explains cash management accounts, credit union overflow, using multiple banks, and so forth. I can't help but think a good CFO or comptroller would be well aware of these.
- DennisP 4y ago
  Yes, I'm aware that I can put money in multiple accounts, or get an account that spreads the money to multiple accounts for me. None of these are what I was responding to: the suggestion to "purchase 3rd party insurance." The closest in that article is DIF but even that isn't insurance you go and buy, it's another kind of special bank account available at DIF's member banks. As far as I can tell, you can't just go buy supplemental deposit insurance, but for some reason people keep suggesting that as something SVB's depositors should have done. (And as someone who's worked as the first employee of a startup, I can tell you it was while before we were able to get a CFO.)
  - IncRnd 4y ago
    You can purchase DIF, when the account is at a participating bank. SVB chose not to participate in that non-FDIC program. However, SVB knew all about the program, even commenting on FDIC rule changes for it over a decade ago. [1] Ultimately, people will have to accept that SVB wasn't as trustworthy of a guardian as some other banks. It appears that people were pushed into using SVB, because it was part of the VC ecosystem. It's an individual CFO or Founder's decision as to whether to insure deposits or not, but claiming ignorance of the possibility is going to be ignored by a lot of others. [1] fdic.gov/resources/regulations/federal-register-publications/2010/10c20ad66rates.pdf
    - DennisP 4y ago
      I mentioned DIF above, and as I said there, it's not third-party insurance that you can go purchase. What you can do is get certain accounts that automatically include it for free: https://www.difxs.com/DIF/Home.aspx https://www.difxs.com/DIF/Home.aspx Here is the complete list of DIF-covered banks: https://www.difxs.com/DIF/DIFmemberbanks.aspx https://www.difxs.com/DIF/DIFmemberbanks.aspx It's a short list, they're small banks, and they all have addresses in Massachusetts. Wells Fargo and Bank of America, for example, are not on the list.
      - IncRnd 4y ago
        If you have an account in need of insurance in excess of the FDIC limits, you can speak with your CFO about depositor bonds or contact the appropriate party about any of the other methods in the links that were posted in this thread.
        DennisP 4y ago
        Unless you have a link for these depositor bonds, I'll remain skeptical since they weren't mentioned in your previous link, google produces nothing obvious and DIF isn't at all what you'd claimed.
        4y ago
JohnFen 4y ago
If you are serious about looking for solutions, you really need to consult a financial advisor who specializes in these sorts of things. They'll know where to find insurance. They'll also know of a variety of other mitigation strategies that might be better than insurance for your particular situation.