Frequently Asked Questions
Where can I find banks near me that offer ICS®?
See the Find ICS page, which shows where to find the Insured Cash Sweep® service. Depositors of public funds wanting to use the ICS service can can find information on the ICS for Public Funds page.
How can deposits greater than the standard FDIC insurance maximum be eligible for insurance by the FDIC?
The FDIC insures up to $250,000 of a customer’s deposit accounts in a given insurable capacity at an FDIC-insured depository institution. Your ICS funds are divided into amounts under the standard FDIC maximum and placed with other ICS Network members – each an FDIC-insured institution. This makes your deposit eligible for FDIC insurance at each member bank. By working directly with one Network member, you can access insurance through many.
Who has custody of my funds?
Funds placed through Insured Cash Sweep are deposited only in FDIC-insured banks. Your bank acts as custodian for your ICS deposits, and the subcustodian for ICS deposits is The Bank of New York Mellon (BNY Mellon), the largest custodian in the world with $30.5 trillion in assets under custody and/or administration and $1.7 trillion in assets under management.1
Who provides the additional FDIC insurance when my funds are placed using ICS?
Through Insured Cash Sweep, funds are placed in deposit accounts at ICS Network members, and those Network members provide you with access to the additional FDIC insurance coverage. Working directly with just one bank, you can access coverage through many.
Is my account information safe?
Your confidential information remains protected; your relationship remains between you and your financial institution.
Is the Insured Cash Sweep®, or ICS®, service safe to use? Has it been thoroughly tested?
The Insured Cash Sweep service has been thoroughly tested (with many billions of dollars) and has been designed so as to comply with every relevant FDIC requirement. Since its inception, thousands of depositors have successfully submitted funds for placement through ICS.
Use of the Insured Cash Sweep service makes it possible for depositors to gain access to multiple millions of dollars of FDIC insurance on funds that are placed in demand deposit accounts, money market deposit accounts, or both. And, no depositor has ever lost a penny of FDIC-insured deposits.
The service is offered by Promontory Interfinancial Network, a trusted fintech provider chosen by more than 3,000 banks across the nation, and has received an exclusive endorsement from the American Bankers Association through its subsidiary, the Corporation for American Banking, following a comprehensive due-diligence review process.
Has the FDIC weighed in on the usage of such programs?
Since the creation of the FDIC more than eight decades ago, depositors have always had the option of depositing funds at multiple FDIC-insured banks to gain access to deposit insurance coverage in excess of the standard single-bank insurance amount, which is now $250,000. The FDIC has always known of this practice and at times has even encouraged it. Deposit placement services, such as Promontory Interfinancial Network’s Insured Cash Sweep service (and its CDARS service, which enables funds to be placed in CDs), help depositors to achieve the same familiar result more easily and with added benefits, such as the opportunity to promote local lending through reciprocal deposits that the depositor’s bank receives in return for deposits placed at other banks.
The FDIC routinely acknowledges that deposit placement services can be used to provide access to expanded deposit insurance coverage. For example, in a November 2015 “frequently asked questions” document, the FDIC specifically describes how a participating bank can place funds at other participating banks through a bank network to give its customer full insurance coverage on a deposit in excess of $250,000.
Some banks receiving deposits placed through a Promontory Interfinancial Network service have failed during Promontory Interfinancial Network’s history, and every resulting claim for deposit insurance has been paid in full by the FDIC.
Insured Cash Sweep (like CDARS) has been thoroughly tested, and reciprocal deposit placement services are recognized both in the FDIC regulations and in state statutes and regulations throughout the United States.
1 As reported by BNY Mellon in September 30, 2016. Please see https://www.bnymellon.com/us/en/who-we-are/index.jsp for details.
Placement of customer funds through the ICS service is subject to the terms, conditions, and disclosures set forth in the agreements that a participating institution’s customer enters into with that institution, including the applicable Deposit Placement Agreement. Limits and customer eligibility criteria apply. The depositor is responsible for excluding banks at which the depositor has other deposits in the same insurable capacity from eligibility for placement through ICS. ICS program withdrawals are limited to six per month when using the ICS savings option. If a depositor is subject to restrictions with respect to the placement of funds in depository institutions, it is the responsibility of the depositor to determine whether the placement of the depositor’s funds through ICS, or a particular ICS transaction, satisfies those restrictions. With a depositor’s consent, a bank may choose to receive fee income instead of deposits from other banks. Under these circumstances, deposited funds would not be available for local lending. ICS and Insured Cash Sweep are registered service marks of Promontory Interfinancial Network, LLC.