I keep a good chunk of my emergency savings in M1 5% HYSA. I was reading the small print on the FDIC insurance for this savings account. It makes it sound like the money isn’t insured until M1 “sweeps” it into a partner bank. I don’t fully understand what this means. Do I need to be concerned that my savings isn’t FDIC insured at any point? I copied and pasted the small print below. Thank you!
“The cash balance in your Cash Account is eligible for FDIC Insurance once it is swept to our partner banks and out of your brokerage account. Until the cash balance is swept to partner banks, the funds are held in a brokerage account and protected by SIPC insurance. Once funds are swept to a partner bank, they are no longer held in your brokerage account and are not protected by SIPC insurance. FDIC insurance is not provided until the funds participating in the sweep program leave your brokerage account and into the sweep program. FDIC insurance is applied at the customer profile level. Customers are responsible for monitoring their total assets at each of the sweep program banks. A complete list of participating program banks can be found here.”
“The cash balance in your Cash Account is eligible for FDIC Insurance once it is swept to our partner banks and out of your brokerage account. Until the cash balance is swept to partner banks, the funds are held in a brokerage account and protected by SIPC insurance. Once funds are swept to a partner bank, they are no longer held in your brokerage account and are not protected by SIPC insurance. FDIC insurance is not provided until the funds participating in the sweep program leave your brokerage account and into the sweep program. FDIC insurance is applied at the customer profile level. Customers are responsible for monitoring their total assets at each of the sweep program banks. A complete list of participating program banks can be found here.”
Statistics: Posted by CantTimeIt — Tue Aug 20, 2024 8:43 am — Replies 3 — Views 101