How do Insured Sweep Accounts work?

Suppose you have a client with $1 million in deposits that wants to be fully federally insured. Using an Insured Sweep Account, you can provide the client with a single account that makes their funds eligible for full insurance coverage through participating banks.

To insure balances in the Insured Sweep Account, funds are distributed to other banks in the NBID network in increments not exceeding the $250,000 Standard Maximum Deposit Insurance Amount offered by the FDIC's insurance fund. In this example, the first $250,000 will be allocated to one bank, another $250,000 to a second bank, an additional $250,000 to a third bank, and the remaining $250,000 can stay with your bank. By placing less than $250,000 at each bank, the entire account balance can be insured by the FDIC's insurance fund (provided certain pass-through conditions are met).

Using Insured Sweep Accounts allows your bank to attract and retain large-value clients such as businesses, public funds, and higher-net-worth individuals. For your clients, it eliminates the need to keep track of multiple accounts at various banks. All transaction activity and network allocations are consolidated into one simple statement for clients.