Expanded FDIC Insurance — Helping Protect Larger Cash Balances A Smarter Way to Protect Client Cash

Many clients hold cash balances that exceed the standard FDIC insurance limit of $250,000 per depositor, per bank, per ownership category. The Deposit Management Program is designed to help address this challenge by providing access to expanded FDIC insurance coverage through a network of participating FDIC-insured banks. 

Instead of keeping all cash at a single institution, the program strategically allocates deposits across multiple FDIC-insured banks, helping clients maintain access to FDIC protection on larger aggregate balances. 

How the Program Works 

When a client enrolls: 

• Cash is placed into deposit accounts at multiple FDIC-insured U.S. banks (Program Banks) 

• Funds are held in standard bank deposit products such as: 

• Money Market Deposit Accounts (MMDAs) 

• Demand Deposit Accounts (DDAs) 

• Deposits remain client-owned, even though they are administered through program infrastructure 

The process is handled behind the scenes — clients continue to interact with their primary banking relationship and platform as usual. 

The Role of Each Party 

Client 

• Maintains beneficial ownership of all deposits 

• Can view participating banks and exclude specific banks if desired 

Bell Bank 

• Acts as agent for clients to place and move funds within the program 

ModernFi (Program Administrator) 

• Coordinates deposit allocation across the network of participating banks 

• Maintains deposit tracking records across institutions 

Custodian Bank 

• Facilitates movement of funds to and from Program Banks 

Understanding FDIC Insurance in the Program 

FDIC insurance: 

• Is backed by the full faith and credit of the U.S. government 

• Covers principal plus accrued interest 

• Applies per depositor, per bank, up to the Standard Maximum Deposit Insurance Amount (currently $250,000) 

Because funds are placed across multiple FDIC-insured institutions, clients may be eligible for significantly higher total insured coverage, assuming they do not already hold deposits at those same banks outside the program. 

Important Coverage Considerations 

FDIC insurance limits apply per bank, across all accounts a client owns at that bank — whether held directly or through an intermediary program. 

If a client already has deposits at a Program Bank outside the program: 

• Those balances combine for FDIC insurance calculation 

• Amounts above the FDIC limit at that bank may be uninsured 

Advisors should encourage clients to periodically review participating bank lists and disclose any outside deposits. 

Operational Simplicity for Clients 

Clients: 

• Do not need to manually open accounts at each bank 

• Do not need to manage fund movements between institutions 

• Access and monitor balances through a single platform 

The experience is designed to feel like a single account, even though deposits are diversified across multiple institutions behind the scenes. 

Flexibility and Transparency 

Clients can: 

• View which banks hold their deposits 

• Exclude specific banks if desired 

• Access funds through their primary account relationship 

Risk and Responsibility Disclosure (Client-Friendly Summary) 

While the program helps expand FDIC insurance access: 

• Insurance is still subject to FDIC rules and limits 

• Coverage depends on total deposits a client holds at each individual bank 

• Neither the administrator nor participating banks guarantee each other’s financial condition 

Why Advisors Use Deposit Management Programs 

For Clients 

• Helps protect large cash allocations 

• Provides institutional-level cash management structure 

• Maintains liquidity and daily access to funds 

For Advisors 

• Helps solve concentrated cash risk 

• Supports fiduciary risk management discussions 

• Enhances balance sheet diversification strategies 

Key Takeaway 

The Deposit Management Program helps clients extend FDIC insurance coverage beyond traditional single-bank limits by distributing deposits across a network of FDIC-insured banks — while maintaining a simple, centralized client experience.