How insured sweep accounts can provide full FDIC coverage for large deposits

The Federal Deposit Insurance Corporation (FDIC) provides insurance up to $250,000 per depositor, per ownership category at each FDIC-insured financial institution. However, if you have a deposit that exceeds this $250,000 limit, there are still ways to get it fully insured. Through our partner networks, UBT offers insured sweep accounts that allow you to spread out your funds and gain access to millions in aggregate insurance through program banks,* all while maintaining a single banking relationship with us.

How do insured sweep accounts work?

Insured sweep accounts make it simple to get large deposits fully insured. It would take quite a bit of time and effort to visit multiple banks on your own and set up an account at each one, then continuously manage each of those banking relationships — instead, insured sweep accounts automatically spread your funds across accounts at participating banks until all funds are insured. UBT remains your single point of contact, and we consolidate all account activity into one statement for you to view.

For example, let’s say you have $1 million you’d like to deposit. A sweep account would split that amount into portions that will each remain below $250,000 with interest. Then, the insured sweep account would allocate one of those portions to a UBT account and each of the remaining portions to their own accounts at different participating banks. This allocation keeps your accounts fully insured as they’re each set up to remain within the FDIC’s $250,000 limit per institution. From there, your funds will automatically be swept to and from your account to ensure they fall within the threshold for FDIC coverage while you retain full access to them. 

Are these accounts safe?

Because each participating bank is FDIC-insured, insured sweep accounts are highly secure even in the unlikely event of a participating bank’s failure. Since the inception of the FDIC Deposit Insurance Fund in 1933, no depositor has lost FDIC-insured funds due to a bank’s failure.

What returns and liquidity do insured sweep accounts provide?

Different accounts provide different levels of liquidity and rates of return, and we’ll work with you to determine which best fits your needs. Through our partner networks, UBT offers several options that either provide high liquidity, high returns, or a mix of both.

How do I open one of these accounts?

Our Treasury Management experts make it easy to open an account, providing options based on your unique situation and then guiding you through the opening process. Reach out to open your account today!