Flourish Cash was built to keep all of your deposits covered by FDIC insurance. As a result, if your account value grows beyond the total amount of FDIC coverage you are eligible to receive through Flourish Cash, the system may automatically transfer money back into your linked bank account.
Flourish Cash currently works with eight Program Banks, meaning the total amount of FDIC insurance customers are eligible to receive in an individual account is $2 million ($250,000 per account multiplied by 8 Program Banks) and in a joint account is $4 million ($500,000 per account multiplied by 8 Program Banks).1 The total amount of FDIC coverage you are eligible to receive will decrease if you opt out of Program Banks.
To give a quick example of how this all works in practice, let’s assume you transferred $1.8 million into your individual Flourish Cash account, through which you are eligible to receive $2 million in FDIC insurance coverage. If, on the next day, you opted out of using 2 Program Banks, the total amount of coverage you are eligible to receive would decrease to $1.5 million ($250,000 per account multiplied by 6 total Program Banks). In that case, the system would automatically initiate a transfer back into your external bank account of $300,000 in order to keep you under the $1.5 million total FDIC limit, even if you didn’t have a request scheduled.
Similarly, over time, monthly interest payments could cause you to exceed the maximum allowed balance. In that case, the excess cash would once again be automatically transferred back to your linked checking account.
For Flourish Cash Institutional Accounts: While we are able to provide up to $1.5MM1 in FDIC insurance for these accounts, there is no limit on the amount you can deposit into your organization’s Flourish Cash account. We’ll simply work to maximize the amount of FDIC insurance coverage you receive, and your entire account balance will continue to receive the same interest rate.
1 The cash balance in a Flourish Cash account that is swept to one or more Program Banks is eligible for FDIC insurance, subject to FDIC rules, including FDIC aggregate insurance coverage limits. FDIC insurance will not be provided until the funds arrive at the Program Bank. There are currently at least 6 Program Banks available to accept deposits for institutional Flourish Cash accounts (accounts for corporations, partnerships and other legal entities) and at least 8 Program Banks available to accept deposits for personal Flourish Cash accounts (individual, joint and revocable trust accounts), and we are not obligated to allocate customer funds across more than this number of Program Banks if there is a greater number of banks in the Program. Customers are generally eligible for FDIC insurance coverage of $250,000 per customer, per Program Bank, for each account ownership category. Thus, institutional customers are eligible for up to $1,500,000 of FDIC insurance and personal customers are eligible for (i) up to $2,000,000 of FDIC insurance for either (A) an individual account or (B) an account for a revocable living trust in which one person is the only grantor, trustee and beneficiary of the trust (“Individual Revocable Trust Account”) and (ii) up to $4,000,000 of FDIC insurance for either (A) a joint account with two owners or (B) an account for a revocable living trust in which the same two persons are each the only grantors, trustees and beneficiaries of the trust (“Joint Revocable Trust Account”). The total FDIC coverage for a two-person household is calculated assuming that each household member has an individual account and that both household members share a joint account. If the number of Program Banks decreases for a customer (either because a Program Bank is no longer participating in Flourish Cash, because a customer’s cash is not eligible to be swept to a Program Bank based on criteria set by the Program Bank (which will be disclosed at account opening), or because a customer opts out of having their cash swept to a particular Program Bank), the amount of FDIC insurance for which the customer would be eligible through Flourish Cash would be lower. Typically, all of a customer’s deposits at a Program Bank in the same ownership category (including deposits held outside Flourish Cash or held through multiple Flourish Cash accounts with the same ownership category) count toward the FDIC insurance limit for deposits at that Program Bank. Customers are responsible for monitoring whether they maintain deposits at a Program Bank outside of Flourish Cash and should consider opting out of having their cash swept to any such Program Bank to avoid exceeding FDIC insurance limits. Although Flourish Cash is offered through a brokerage account and cash held in brokerage accounts often has the benefit of SIPC protection, until such time as we offer securities products, customers likely will not have the benefit of SIPC protection for cash held in their Flourish Cash account. Further, SIPC protection is not available for any cash held at the Program Banks. For additional information regarding FDIC coverage, visit https://fdic.gov