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Yes, some financial institutions offer FDIC "sweep" accounts that automatically allocate cash deposits among accounts in multiple partner banks when the balance
by commoner 4y ago
Yes, some financial institutions offer FDIC "sweep" accounts that automatically allocate cash deposits among accounts in multiple partner banks when the balance exceeds the maximum amount covered by the FDIC ($250,000 per account). Each partner bank can hold up to $250,000 of FDIC-insured deposits, allowing FDIC sweep accounts to claim FDIC insurance of greater than $250,000. Quite a few of these accounts offer $1.25 million or $2.5 million of FDIC coverage.
- paxys 4y agoA big part of the current SVB coverage is that they had such a "sweep" service that split up customer deposits into smaller chunks and deposited them as securities at other banks, but it turns out those accounts were still in their own name rather than the customer's, and so people who used the service still can't access them.