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Many fiduciaries believe cash to be synonymous with risk-free. This is not always the case.
Regardless of market conditions, stakeholders want confidence that an organization’s cash is secure and insured. The standard Federal Deposit Insurance Corporation (FDIC) insurance coverage is $250,000 per depositor, per insured bank, for each ownership category. We recommend considering the following deposit account alternatives as part of your cash investment strategy, paired with sound investment advice. A mix of these cash vehicles cannot only safeguard your cash, but also maximize interest.
FDIC Insured Deposits
FDIC insures bank deposits up to $250k per bank, not per account within a bank.
- Avoid having more than the $250k limit in deposits at any one bank.
- This includes all deposit accounts: checking, savings, and money market.
Insured Cash Sweep
The Insured Cash Sweep program by IntraFi Network allows banks to pay a fee to access a network of other banks in the FDIC network.
- ICS® accounts extend FDIC insurance by breaking up large cash deposits and distributing the smaller amounts to multiple banks.
- On demand access to your cash deposits.
CDARS
Invest in Certificates of Deposit (CDs) through IntraFi NetworkSM
- Unlike ICS® accounts, select from a range of maturities. (i.e. 4 weeks, 13 weeks, 26 weeks, 52 weeks, 2 years, 3 years, 5 years)
Treasury Bills
Invest in safe short-term securities like Treasury bills.
- Zero default risk: backed by the full faith and credit of the US government.
- State and local taxes not imposed on interest income, only federal taxes.
- Can be bought or sold easily in the secondary market. (Original maturities of 4, 8, 13, 26 and 52 weeks)
CBM’s outsourced accounting and advisory group: Our goal is to make running the back end of your business look easy, so that you can focus on what matters most. Our experts in business strategy, markets, audit and tax will partner with you to set and exceed your organization’s goals.
Please contact Dominick V. Bellia via our online contact form for more information.
Councilor, Buchanan & Mitchell (CBM) is a professional services firm delivering tax, accounting and business advisory expertise throughout the Mid-Atlantic region from offices in Bethesda, MD and Washington, DC.
