A single Raisin login lets you maximize deposit insurance coverage

While stock market investments have traditionally been preferred by investors and savers for their returns compared to deposit products, the calculus may be at a turning point. Given lower returns in the stock market and with interest rates for savings products reaching their highest point in decades, the security and reliable returns of insured deposits are an increasingly appealing option for both savers and investors.

According to the Wall Street Journal, high-net-worth individuals are turning away from traditional deposit accounts to savings products that offer higher returns, like high-yield savings accounts and money market deposit accounts.

High-yield savings products differ from stock market investments in a few key ways, including one of the most important: federal deposit insurance.

In light of recent events in the banking industry, federal deposit insurance has become a hot topic. Federal deposit insurance is coverage offered by two main federal agencies, the Federal Deposit Insurance Corporation (FDIC) and the National Credit Union Administration (NCUA), on deposits held in insured banks and credit unions, respectively.

Did you know that the FDIC has never failed to pay insured depositors at failed banks since they were founded in 1933 and the NCUA, which protects credit union funds, has also never failed to pay insured depositors at failed credit unions since its founding in 1970?

Compared to stock or other forms of investments, which are vulnerable to complete loss of principal, deposits at federally insured financial institutions are extremely safe. Typically, deposits are covered up to $250,000 per depositor, per institution, per account ownership category. For joint accounts, this amount increases by $250,000 per co-owner, per institution.

If you want to take advantage of deposit insurance at multiple financial institutions, however, it isn’t easy. You would need to open accounts with each individual institution, keep track of a variety of passwords, and log into each separate account in order to manage your funds.

That’s where Raisin comes in.

With Raisin, the whole process is streamlined. Opening a no-fee Raisin account takes just a few minutes and allows you to fund savings products across an exclusive network of 35+ federally insured banks and credit unions.

And, because we only partner with federally insured financial institutions, you can spread your savings across as many institutions as you would like. This means you can keep deposits at each institution below the per-institution insurance limits and keep more of your cash covered — all with a single secure login.

Let’s take a look at some examples.

Say you had $300,000 in an individual account at a single bank or credit union. In this case, only the first $250,000 would be eligible for insurance coverage. If that institution failed, the remaining $50,000 remainder of your deposit would be vulnerable to loss.

With Raisin, you can easily put $200,000 with one bank or credit union (to leave plenty of room for accrued interest) and an additional $100,000 can be deposited with another institution. Now, 100% of your savings is covered by federal deposit insurance, and you are able to leave room for any anticipated interest so it can also be covered, giving you peace of mind that your hard-earned cash is protected.

Going a step further, if you had a nest egg of $6 million that you wanted to have covered by deposit insurance, you could follow a similar formula. Using our online platform, you could open accounts at 30 unique federally insured institutions — with just a few clicks for each— and deposit $200,000 equally among them, putting your cash to work and leaving room for any anticipated interest to be covered as well.

Taking this example to its extreme, if you and your spouse had a total of $14 million in cash savings that you wanted to keep safe, Raisin makes the process simple. Just like in the other examples, you can spread the cash around, but this time opening joint accounts. You would be able to deposit $400,000 across 35 institutions, securing your funds with federal deposit insurance and, again, leaving room for potential interest earnings to stay within insurance limits.

With Raisin’s full range of banks and credit unions, you have the opportunity to get millions in federal deposit insurance by spreading your funds amongst our growing number of partner institutions.

Raisin continues to add new institutions on a regular basis to continue to enhance insurance coverage for its customers and provide consumers with a diverse suite of financial institutions to align with their personal values. Please keep in mind that insurance limits include all deposits you have at a given bank or credit union, whether made through Raisin or otherwise.

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