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34

They might not have to open accounts at 12 bank because the coverage does allow multiple accounts at one institution if the accounts are joint accounts. It also treats retirement accounts a separate account. The bigger issue is that most millionaires don't have all their money siting in the bank. They invest in stocks, bonds, government bonds, international ...


18

Rich people use "depositor" banks the same way the rest of us use banks; to keep a relatively small store of wealth for monthly expenses and a savings account for a rainy day. The bulk of a wealthy person's money is in investments. Money sitting in a bank account is not making you more money, and in fact as Kaushik correctly points out, would be losing ...


18

First, what's the reason? Why do you have that much in cash at all - are you concerned about market volatility, are you planning to buy a house, do you have tens of millions of dollars and this is your slush fund? Are you a house flipper and this is part of business for you? If you need the money for short term use - ie, you're buying a house in cash next ...


11

There is a subtle difference. In an FDIC insured bank account, you are guaranteed to get all of your money back out. If you put $1000 into your bank account, you are guaranteed to be able to get at least $1000 back out when you want. The value of the account (in dollars) can never go down, for any reason. When you put money into a brokerage account, cash ...


9

I just graduated from college and I am already planning my retirement. ... in terms of money sitting in my bank account post retirement, assuming Ii have $250,000 what is the highest interest that I can earn with it? Assuming you are 22, and will retire in 45 years at age 67. There is no way to predict interest rates. When I was 22 and just out of ...


9

The rate paid on savings accounts does not indicate that a bank is risky or not. There are lots of regulations in place for FDIC insured banks to comply with as well. There is a whole lot to read on this depending on how bored you are, see the FDIC's website below. https://www.fdic.gov/regulations/


8

The FDIC's guarantee does incentivize putting your money in the bank that gives the best interest. In fact, banks do compete on interest rates and people do switch to get better interest rates. The reasons that everybody doesn't switch to the bank with the best interest rate are probably varied but likely include Banks compete on more than just interest ...


7

Yes. Although I imagine the risk is small, you can remove the risk by splitting your money amongst multiple accounts at different banks so that none of the account totals exceed the FDIC Insurance limit. There are several banks or financial institutions that deposit money in multiple banks to double or triple the effective insurance limit (Fidelity has an ...


7

If you are concerned about FDIC coverage, then yes, you can spread your money across multiple banks. The limit is $250k, so after you invest in property, 4 banks should do it. That having been said, in my opinion, it would be a waste to keep all this money in a bank's savings account. You will slowly lose value over time due to inflation. I suggest you ...


6

Does this mean each account you have at a bank is insured up to $250,000 or is $250,000 the maximum for all accounts at a bank? It is maximum of $250,000 across all accounts held by an individual or ownership at a bank. So if you are married you can get a max of $750,000 if you open the accounts as below in the same bank; One [or more] accounts in your ...


6

No. And just a caution about that super low risk: suppose that you lived during the late 70s and early 80s, when savers in the United States could get interest rates over 10% for savings. You put your money into an account in 1980, knowing that in five years, you'll have made a solid amount of interest. Except that you might have been smarter to convert ...


6

I found out there is something called CDARS that allows a person to open a multi-million dollar certificate of deposit account with a single financial institution, who provides FDIC coverage for the entire account. This financial institution spreads the person's money across multiple banks, so that each bank holds less than $250K and can provide the ...


6

Everyone would like a savings/checking account that has the same liquidity as others but pays multiple times as much, but such a thing would break the laws of finance. The thing keeping savings and checking accounts cheap isn't particularly the FDIC insurance but the high liquidity and near certainty that you will not lose money. In all of finance you are ...


5

As was suggested here, I checked with the state for "Unclaimed Funds," and despite the fact that I had already done so and found nothing, the funds were now there to be retrieved. So, the takeaway here is, keep checking periodically, it might just take a bit for things to settle out. This link is endorsed by NJ State, and covers much of the US: http://www....


4

The FDIC publishes its rates if you want to get into the nitty gritty details. Broadly speaking, rates are determined by the amount of deposits an institution holds and the riskiness of the bank. If you want to determine what any particular bank would get charged, though, it would require a fair amount of analysis because there are adjustments in addition ...


4

"Why" questions like this are hard or impossible to answer, but I would argue that there is much more practicality in adjusting Social Security benefits and other items like IRA maximums, since those limits are continually relevant. When is the last time you heard about a bank or brokerage failure that triggered an FDIC or SIPC payout? And how many ...


3

Yes a [business has $250,000 of FDIC coverage][FDIC]. But make sure that the corporation is recognized as being a separate entity from the owner, or it can be mixed in with the personal accounts, and not have as much coverage as you expect. A corporation, partnership, or unincorporated association must be separately organized under state law and ...


3

The limit is per account type, per bank, per depositor: https://www.fdic.gov/deposit/deposits/brochures/deposit-insurance-at-a-glance-english.html You can easily distribute your millions across multiple banks, or under your spouse's name, or in a different type of account ownership categories (like savings, IRAs, joint accounts, ...), and be covered.


3

No bank wants to be considered "risky" at all. Savings rates are intended to be essentially "risk free"; they should not include any component of credit risk. Banks can have higher savings rates for several reasons, such as being willing to take less profit in exchange for more deposits (e.g. a higher rate if you deposit, say, $25,000) or as a loss-leader ...


3

There are lots of credit unions that are insured by the National Credit Union Administration (NCUA) through the National Credit Union Share Insurance Fund (NCUSIF) instead of the Federal Deposit Insurance Corporation (FDIC). Both cover individual accounts up to $250,000. If you are looking for non-trivial returns on your money, you should consider a ...


3

With a 1/4 million you should be looking at staying fully invested and doing income draw down you can safely take 3 or 4 % Basing your retirement income 100% on cash investments is very risky I can remember when inflation hit 15% in the UK and it has been at similar levels in the usa around 14% in 79.


3

SIPC also protects cash, not just securities. Your cash is still insured. From https://www.sipc.org/for-investors/what-sipc-protects SIPC protects against the loss of cash and securities – such as stocks and bonds – held by a customer at a financially-troubled SIPC-member brokerage firm. The limit of SIPC protection is $500,000, which includes a $250,000 ...


3

Typically a wire transfer is used to move a large amount from a bank to an escrow agent. The escrow agent should have no problem receiving wire transfers from several banks, as long as they’re all received by the deadline. Wire transfers are generally processed within a few hours if they’re requested in the morning, and next day if requested late in the ...


2

For cash, SIPC insurance is similar to FDIC insurance. Your losses are not covered, but you're covered in case of fraud. Since your cash is supposed to be in a trust account and not commingled with brokerage's funds, in case of bankruptcy you would still have your cash unless there was fraud.


2

The relevant portions of the FDIC's Your Insured Deposits brochure ("a comprehensive description... not intended as a legal interpretation") states that a joint account is insured up to $250k per depositor if it meets three conditions: All co-owners must be living people. Legal entities such as corporations, trusts, estates or partnerships are not ...


2

Usually they are, but of course you should check the registration number the bank shows against the FDIC website to make sure you don't fall for a fake. In case the account is offered by a credit union rather than a bank, they will have insurance through NCUA instead of FDIC, verify NCUA charters here. This applies to both online and brick-and-mortar ...


2

If you are dealing with a bank then you are interested in FDIC coverage. If you are dealing with a credit Union it is NCUA coverage. Both NCUA coverage and FDIC Coverage have a $250,000 limit. Both types of institutions have coverage that can exceed the $250K amount if they have multiple account types with that one institution: What are the basic NCUA ...


2

In the last 10+ years it is extremely rare to lose money when a bank fails, but it does happen. Here some information from a bank that failed in 2020 but most people avoided losses: Details of The First State Bank Failure According to this FDIC press release, “The First State Bank had approximately $152.4 million in total assets and $139.5 million in total ...


2

They don't want cash. And they don't want a personal check. So they will want cashiers checks. They shouldn't have a problem with 4 of them, but let them know in advance. The biggest problem will be coordinating getting 4 checks from 4 different financial institutions. I would call them to make sure it can be done on your schedule. This is especially true ...


1

While you are correct that no broker-dealer ever qualifies for FDIC and it could be sufficient for customers to know that general rule, for broker-dealers located at or 'networked' with a bank -- and nowadays many probably most are -- these explicit statements that non-bank investments are not guaranteed by the bank or FDIC and may lose principal (often ...


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