Insured by the Federal Deposit Insurance Corporation, Insured Cash Sweep (ICS) is a service that allows you to secure large deposits while still maintaining access to your funds. You can also continue earning interest on any funds that are placed into a demand deposit account or money market deposit account. Not all banks and savings associations offer ICS at this time. Learn more about Insured Cash Sweep, how it works, and why you should speak with a business banking professional about using this secure and convenient service.
How Does Insured Cash Sweep Work?
When depositing funds at a financial institution in a single ownership capacity, you have the ability to access up to $250,000 in Federal Deposit Insurance Corporation (FDIC) insurance at that bank. However, ICS service allows you to receive FDIC protection for millions of dollars while still being able to work with just one bank that offers this service. Any financial institution that offers ICS services are included in a unique network known as the ICS Network. All deposits made are handled through a network member of your choosing. When placing a large deposit using ICS, your funds are placed into a demand deposit account, money market account, or both.
Although you are depositing your funds at a single bank, the financial institution can place received deposits into interest-bearing savings accounts at other in-network FDIC-insured banks. As the funds are spread across multiple banks in the network, the amount remains below the $250,000 FDIC limit at each bank and the customer remains eligible for the total amount of deposit insurance that is larger than the standard limit allowed at one bank. Interest rates are set by the customer’s chosen financial institution and the customer receives a bank statement that covers the full amount of the deposit.
Is Insured Cash Sweep Safe?
When you deposit funds using ICS services, your information remains confidential and protected. Although your funds may end up in accounts at other network institutions, your relationship remains between you and your financial institution. Insured Cash Sweep has been rigorously tested again and again using billions of dollars. The unique program is specifically designed to comply with all FDIC requirements to ensure that it remains safe and secure. Since its establishment, Insured Cash Sweep has been used successfully by thousands of depositors who are now able to gain access to millions in FDIC insurance on funds.
What Are the Benefits of ICS?
There are a number of benefits that come with using ICS services. One of the most important is the safety aspect. As funds are placed in accounts issued by FDIC-insured institutions, any large deposits made are eligible for full FDIC insurance coverage. Interest rates are also favorable and can be compared to high-quality, fixed income investments. The convenience factor should also not be ignored. With ICS, depositors can manage all of their account investments through a single relationship with a bank of their choosing that offers these services.
With the ICS service, your business is able to maintain access to your funds. Limitless withdrawals are possible using the ICS checking option. If you prefer the ICS money market savings option, you can take advantage of up to six withdrawals each month. You will also have the peace of mind that your ICS funds are on deposit in a FDIC-insured and regulated financial institution that is participating in the ICS Network. By putting excess cash balances into your checking account to work with either a money market account or interest-bearing account, you can also earn interest over time.
Who Should Use ICS Services?
Do not allow your cash to sit idle when it could be making you more money. The Insured Cash Sweep program helps you diversify your funds which can be highly beneficial for your long-term financial goals. ICS services may be right for your business if you want to retain large-dollar relationships, increase asset liquidity, replace other costly funding options, or lower the risk of collateral-value deterioration. It is also be an excellent program for businesses who want to work with a bank that they trust while still receiving the benefits of working alongside a network of FDIC-protected members.
Learn More About Insured Cash Sweep
When you have a large amount of cash that you would like to invest, you want to know that your funds are protected with FDIC insurance. The Insured Cash Sweep program is the perfect solution. When your investment is broken down into amounts that stay below the FDIC limit and spread across multiple banks, you can accrue maximum interest while your money remains safe and secure. You can also withdraw your money as needed. For more information about Insured Cash Sweep or how your business can participate in the program, contact a business banking professional at FVCbank today.