EDIT 1: Turns out I was somewhat incorrect. THIS PROTECTION DOES NOT APPLY TO REGULAR BROKERAGE ACCOUNTS:
- "The following Fidelity accounts utilize the [Sweep] Program:
- The Fidelity® Cash Management Account
- Certain eligible Fidelity retirement accounts such as Traditional, Rollover, and SEP IRAs; Fidelity Roth IRAs, Fidelity SIMPLE IRAs
- Fidelity Health Savings Account
Personally, as someone else stated below, I will be opening up a Cash Management account so I can move my tendies in there after.
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THIS IS A REPOST. ORIGINAL POST GOT BURIED.
I've seen a fair amount of apes worried about having to move their tendies into 20 different banks so it's all insured. Turns out, Fidelity does all that for you.
"Fidelity automatically performs all transfers between your account and the program banks and provides anytime access to view the amount of cash at each program bank via Fidelity.com.
Each program bank will receive a maximum of $245,000 to help ensure that any accrued interest is also eligible for FDIC insurance (which has a $250,000 coverage limit). Any deposits over $245,000 will be systematically distributed across multiple available program banks."
Source: https://www.fidelity.com/why-fidelity/safeguarding-your-accounts
"For example, if $500,000 is deposited, $245,000 will be swept into each of the first two available program banks and the remaining $10,000 will be swept into a third. If a subsequent deposit of $50,000 is made, that will be deposited into that same third program bank. "
I'm still going to be talking to a CPA to get the most out of these protections, but I think it's safe to say that if you're invested with Fidelity, you can have some peace of mind.
I'm sure other brokerages offer something similar, if not the same thing. Please contact your brokerage to find out.
I've posted several times about Insured Cash sweep as a "safe" place to store post-moass tendies.
For those who don't know Insured Cash Sweep is a service that utilizes a network of 3000 banks to insure tendies up to $750 Million by distributing them amongst those 3000 banks and having $250k FDIC each, while functioning as a single bank account. https://www.insuredcashsweep.com/
But what do you do if your tendies are way more than $750 million? You could open multiple ICS accounts, one in your own name and more under corporate names, functioning as holding companies, perhaps. (Not financial or legal advice, seek advice from a competent professional).
But I wasn't really satisfied with this answer so I started looking around and found a list of the 50 safest banks in the world according to global finance magazine.
https://www.gfmag.com/magazine/november-2020/worlds-safest-banks-2020
A lot of these banks are used by industry or massive agricultural businesses and are not the kind of place you can just open a checking account, but the 2nd safest bank: Zuercher Kantonalbank in Switzerland seems like it might be useful. https://www.zkb.ch/en/home.html
I've read a little about opening a swiss bank account and it's doable from outside Switzerland, apparently the biggest issue is delays and needing to transmit or mail notarized copies of documents. Maybe some of our Euro Apes can shed more light on this.
It occurs to me that any bank may not be safe, but if we have little alternative I suppose the second safest bank on the planet might do. By the way the first US bank on the list that isn't an agribank for massive companies is US Bank at #50, gives you an idea where the US ranks for bank safety.
If you need to store billions in tendies to wait for the dust to settle from not only the MOASS but the potential financial crisis that is unfolding (the continuation of 2008 according to u/criand), then this might be your best option.
Once again none of this is financial or legal advice, just some thoughts of mine. I am eager to hear what you make of this and if any of you have a better idea.
--EDIT--
I
... keep reading on reddit ➡Average investor, just haven't really cared to learn the ramifications between the two... My gut feeling would be to say that if I plan on holding large amounts of cash on the sidelines for awhile to go FDIC insured; is this a correct assumption?
I've also simply assumed that money market is just easier to get into/out of for the broker-dealer when day trading or just holding cash short term when liquidity is more necessary.
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What financial services do people here use to protect large cash and investment accounts that are orders of magnitude over FDIC and SIPC limits?
And on a related note, for people who have sold businesses or received windfalls for 8+ figure amounts, how/where did you receive the money? What steps did you take to safely receive such a large wire and subsequently move the money to long term investments in a secure fashion?
Do people here with substantial cash holdings keep millions in their brokerage cash or high yield savings accounts? Do you feel comfortable knowing the FDIC or SIPC limit only insures a tiny fraction of your holdings?
Aloha apes! First time poster, long time lurker. I wanted to share a resource that might interest apes based in Gmerica.
Aspiration Financial LLC (https://www.aspiration.com) provides a cash management service with 10 banks and the cash management account is insured up to $2.46 million (bigger for joint accounts). They're environmentally conscious and a good place to store our tendies (I believe). As an aside, Fidelity's cash management account is insured up to $1.5 million I believe so that's another place to set up an account.
I've dug a bit to see which 10 banks they use to sweep the tendies and here's what I found:
Aspiration Account Priority List of Banks as of the end of this statement period are:
- Coastal Community Bank (funds that have CCB: https://whalewisdom.com/stock/ccb)
- Bremer Bank, NA (13F: https://whalewisdom.com/filer/bremer-bank-national-association#tabholdings_tab_link)
- Ion Bank (profile: https://pitchbook.com/profiles/advisor/154856-17#overview)
- ProgressBank (profile: https://pitchbook.com/profiles/advisor/131921-20#overview)
- Bank of New Hampshire (13F: https://whalewisdom.com/filer/bank-of-new-hampshire#tabholdings_tab_link)
- EagleBank (profile: https://pitchbook.com/profiles/advisor/232328-35)
- Manufacturers Bank (profile: https://pitchbook.com/profiles/advisor/150557-05#preferences)
- C3Bank, NA (https://www.c3bank.com/)
- The Freedom Bank of Virginia (stock: https://whalewisdom.com/stock/fdva) (profile: https://pitchbook.com/profiles/company/59443-66#signals)
- Bridgewater Bank (Unconfirmed site: https://www.bridgewaterbankmn.com/)
- Nano Banc (site: https://www.nanobanc.com/) (profile: https://pitchbook.com/profiles/company/223677-19#overview)
Aspiration Account Excess Banks as of end o
... keep reading on reddit ➡
Just throwing that out there for input
Thanks for the discussion everyone! I won’t bring it up to management, it sounds like I’m just overly sensitive to my previous situation.
The last restaurant I worked at, a manager trusted and respected by everyone (best man at the owners wedding) had been doing tip out and cash. He was caught and admitted to stealing FOH and BOH tips for years, all to fund a cocaine addiction everyone turned a blind eye to. For the record, I’ve worked in restaurants for over ten years and I love all the drugs and think we should all do more drugs together. This was never meant to be anti drug
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Hi, I know Fidelity does sweeps to put funds in a Cash Management account into FDIC insured bank accounts.
Given that FDIC only covers $250,000 (correct me if I’m wrong), and Fidelity lists only about 24 participating banks, is there a limit to how much can be deposited in a Cash Management account, or a limit to how much can be insured?
