Insured Cash Sweeps: A Financial Tool High Net Worth Individuals Should Be Aware Of

Insured Cash Sweeps: A Financial Tool High Net Worth Individuals Should Be Aware Of

While most people understand the money they deposit in an FDIC-insured financial institution is government backed, many people, particularly high net worth individuals, don’t realize how easy it is to surpass the coverage threshold.

In the unlikely event of a bank failure, the Federal Deposit Insurance Corporation ensures depositors can recover their money up to the coverage limit of $250,000 per account holder and category. But what happens when your bank account exceeds this balance? How can you protect your hard-earned money?

Introducing Insured Cash Sweeps, a powerful financial tool that provides more security to help protect your wealth.

What are Insured Cash Sweeps and How Do They Increase FDIC Insurance Limits?

Insured Cash Sweeps (ICS) help protect the funds you have on deposit in your FDIC-insured bank account by breaking up deposit balances that surpass the standard FDIC coverage limits. Excess money is “swept” into FDIC-insured accounts at multiple financial institutions.

The process is simple. Your primary financial institution opens an ICS account on your behalf and that is where any of your balances that exceed the FDIC limits will be placed.

From there, assets are transferred to partner banks through a third-party network managed by IntraFi. IntraFi's ICS platform allocates funds across a series of participating FDIC-insured banks and makes certain that each account balance remains within the FDIC limit at every institution.

 Are Insured Cash Sweeps Secure?

To help ensure security, IntraFi sets stringent standards for its nearly 3,000 participating banks, mandating that each financial institution is FDIC backed and demonstrates strong financial health as well as compliance with regulatory standards. By thoroughly vetting and continuously monitoring banks within the network, IntraFi can uphold the integrity of ICS, helping to protect funds against undue risk.

What Are the Advantages of Insured Cash Sweeps?

The main advantage of placing your funds in an ICS account is gaining FDIC coverage on balances that surpass the government-established threshold. But the automation capabilities of the IntraFi platform provide additional benefits. Because the platform automatically sweeps funds into new accounts any time the balance extends beyond the $250,000 threshold, you will have peace of mind knowing your money is continuously protected without having to manually monitor balances and make transfers between financial institutions or accounts.

There are other benefits of ICS beyond security and convenience. The interest offered through an ICS account can allow you  to earn more interest on idle cash. By leveraging FDIC-insured banks, network accounts can receive interest rates or investment options that provide additional earnings, often surpassing the returns offered by traditional checking or savings accounts.

Sweep accounts are also easy to manage. Even though deposits reside across multiple accounts, you can maintain simplified access through your primary bank’s online banking portal. From there, they can easily make deposits or withdrawals and transfer money between institutions. Just as important, funds held in a sweep account can be accessed quickly, ensuring access to your funds when needed and from anywhere.

Realizing the Security of Insured Cash Sweeps

With Insured Cash Sweeps, you can efficiently safeguard your wealth while maintaining easy access to cash. You can learn more by contacting a Personal Banker,  but keep in mind you need to bank with an IntraFi network financial institution, like FNBO, to take advantage of Insured Cash Sweep accounts.