Extended FDIC Insurance for Business Deposits

A lock and chain securing a stack of cash.

Since the Great Depression, Americans have been provided with deposit insurance on at least a portion of their deposits at most national banks. But, while the limit has increased 100-fold since its inception, that still might not be enough protection for many businesses. The process of extending that insurance has historically been very cumbersome, but here at ADM, we have a solution.

How FDIC Insurance Works

Following the stock market crash of 1929 and the subsequent bank runs, the U.S. government created the Federal Deposit Insurance Corporation [FDIC]. This new entity’s goal was to prevent further runs on banks and to restore trust in the American banking system. Initially, the FDIC protected $2,500 per depositor per bank, but since inception, those limits have sharply increased to $250,000.

The FDIC receives premiums from banks to provide their customers with deposit insurance. In the case of bank failure, the FDIC will either close the bank and pay back depositors up to $250,000 per depositor or use its funds to compensate another bank for absorbing the failed bank’s balance sheet.

Why would businesses want to extend FDIC protection?

For most individual depositors, $250,000 is probably more than enough insurance for their cash deposits. However, businesses are also limited to $250,000 in deposit insurance per bank. Some depositors, like municipalities, may even have requirements for insuring public funds, and those businesses that keep more than the limit in total deposits at any one bank may be holding unnecessary risk.

While bank failures are uncommon in this era of banking regulation, they still happen just about every year. Regardless of the bank failures, the FDIC boasts that no depositor has ever lost a penny of insured funds, so FDIC insurance is seen as the ultimate protection for cash.

Extending FDIC insurance manually is, at best, a hassle. This process requires businesses to open and maintain accounts at multiple banking institutions so that they can keep their balance at any given bank below the insurance limit. Businesses with highly seasonal cash flows or lots of liquid cash on hand could require a team of professionals to manage their banking relationships just to achieve extended FDIC insurance.

How ADM Provides Access to Extended FDIC Insurance, Without the Hassle

Here at American Deposit Management (ADM), we provide a simple solution to extend FDIC insurance to all of your business deposits*, regardless of the amount. Utilizing our proprietary FinTech and a nationwide network of over 500 financial institutions, ADM can spread your deposits between our member institutions to achieve insurance for all your cash in an instant.

A major benefit of the ADM solution to extending FDIC insurance* is that it requires just one point of contact rather than relationships with a network of banks. And the best part is you keep your current bank. We are here to enhance your banking relationships, not replace them.

Extended FDIC Coverage Combined with Nationally Competitive Returns

In addition to providing access to millions of dollars in FDIC insurance, our technology allows for next-day liquidity and nationally competitive returns on your business cash. This is because when you make a deposit with ADM, the banks in our network compete for your deposits.

It’s no secret that interest rates on cash deposits can be drastically different between banks, especially among geographic areas. Our FinTech allows our clients to take advantage of those rate differences to ensure your cash is earning a competitive rate.

Earn More, Risk Less® with AMMA™ by ADM

When you open an AMMA™ account, our team of cash consultants will develop a strategy to ensure your cash is 100% safe while maintaining the liquidity you require. Even if you require tens of millions in FDIC protection, we’ve got you covered.

At ADM, our team is our secret sauce, and we are always working hard to ensure your safe and earning a competitive return. If you’re interested in extended protection for your corporate cash, reach out to a member of our team.

If you’re looking for even more valuable insights on banking, interest rates, and effectively managing your business cash, be sure to check out our Insights page.

*Funds in an AMMA™ can be deposited with traditional banks or Credit Unions. When funds are deposited at a credit union, NCUA insurance will be available in lieu of FDIC insurance and is functionally equivalent.


*American Deposit Management Co. is not an FDIC/NCUA-insured institution. FDIC/NCUA deposit coverage only protects against the failure of an FDIC/NCUA-insured depository institution.

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