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Comment by zie | Hacker News Reader

Fidelity has a program where they will insure up to 1.2M USD in FDIC insured cash: https://www.fidelity.com/why-fidelity/safeguarding-your-acco...

Otherwise I'd recommend reading from the source: https://www.fdic.gov/resources/deposit-insurance/ as there are lots of weirdness as one should expect from old complicated insurance systems ;)

But really, if you have more than $250k in cash, perhaps you should consider lowering your cash amounts. Certainly there are valid reasons to hold that much cash, but in general, most people probably shouldn't. If you put that cash in treasuries(even very short term treasuries so it's very cash like), you get paid interest for holding the bills, where most banks won't pay you much of anything for holding cash and treasuries are backed 100% by the US govt, unlike FDIC's 250k limit.

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Slightly tangental, Fidelity also has the option to put your accounts in "lock down" mode to prevent funding *outflows* (even transfers between accounts). This can help secure your account in addition to 2FA. I learned about this recently after +10yrs at Fidelity. Sadly, I don't think it is enabled by default.

I wish my bank had the same sort of option to prevent someone from just randomly guessing my account number for an ACH transfer.

This is exactly what I have wanted for a long time! I need to keep some amount of cash reasonably liquid (3-10 day retrieval process would be fine), but hate it sitting around, seemingly with no way to require the bank to mandate that it is really me making the withdrawal request.

Edit: Random internet poster did some testing (https://www.bogleheads.org/forum/viewtopic.php?t=382555) and found that the Fidelity Lockdown Mode will block ACATS pulls, but not ACH. Better than nothing, though still not what I want: money goes in, money does not come out until I sign something in blood.

Actual cash in a deposit box at the bank?

I think most banks have this if you talk to an appropriate rep. I have “insert only” accounts at multiple banks.

Could you give some examples which are available to a consumer accounts with modest balances (ie not exclusive for million dollar clients)?

this will not work if someone broke into your account already, or stole your identity and disguised as you, the first thing they do is to unlock it. Fidelity should have some push-to-apps login approach, I'm not sure if it has one yet.

Hijacked account is different than what GP is describing.

"lock down" is like Tesla's "autopilot" - the name implies more then what it is.

In particular, certain transaction can not and will not be blocked.

As long as you notice the ACH transfer and notify Fidelity, there is a very high likelihood they will be able to return your money. It's pretty easy to turn notifications on for those accounts and get notified as soon as Fidelity is notified about an ACH transfer.

This is one of the reasons ACH transfers take a few days to settle, to allow for fraud checking before settlement.

This is not about ACH. It's about ACATS:

https://www.bogleheads.org/forum/viewtopic.php?t=381060&

Ya, I know. Fidelity's lockdown mode blocks ACATS, but not ACH. Hence why I covered ACH in my comment. ACATS is a non-issue, if you turn on Lockdown mode.

I think this is one of those rare opportunities that I can add something useful to the discussion based on knowledge rather than just my opinion. Some banks are structured in a rather specific way, which allow them to have some rather unique products ( compared to the regular banking that is ).

For example, certain IL bank has a fair amount of charters, which effectively allows them to offer deposit product that goes way over 250k ( at its core, it is basically CDARS though ). 2.5m if I remember right based on the amount of charters.

<< But really, if you have more than $250k in cash, perhaps you should consider lowering your cash amounts. Certainly there are valid reasons to hold that much cash, but in general, most people probably shouldn't. I

This argument has been going on forever and will likely continue for as long as human race exists. There are reasons one should and shouldn't do this, but the reality is that it will heavily depend on individual situation and, I assume, such a person will be sensible enough to ask someone/s that can appropriately advise whether it makes sense for that individual case.

I wasn't trying to say Fidelity was the only game in town that will automatically manage the FDIC insurance process for you. One bonus for Fidelity, their program has been around a while and they manage more money than the US Govt spends in a year, so they have definitely grown into the, to big to let fail category.

I agree with your perspective.

Fidelity also offers an alternative, to its automated FDIC-insured deposit sweep, of keeping a brokerage/retirement account's cash in SPAXX, which is currently yielding 4.22%. (Both options are mostly transparent to the UX, and happen automatically -- you normally only see the dollar total, and a monthly interest/dividend transactions.)

SPAXX is riskier than FDIC-insured sweep, but I don't know how much riskier.

Rates for the FDIC-insured and SPAXX: https://accountopening.fidelity.com/ftgw/aong/aongapp/intere...

Thanks for the tip. I’m at Schwab and it appears they have a rough equivalent called SWVXX. I’ve been considering going more into CD/bond ladders for the rates lately, but it sure would be nice to have the flexibility to pull money out whenever.

I looked into this sort of thing a while back. And, while I have bonds including tax exempt ones, I came to the conclusion that it made sense to keep a 10% or so holding in my brokerage's sweep fund. The difference between that and messing with CDs and high grade bonds just wasn't that much. I series bonds from TreasuryDirect probably do make sense at the moment but you can only invest relatively modest amounts.

Every month I put enough to buy groceries into Series I bonds, with the thought that no matter what they should still be worth that much when they mature. Probably better ways to achieve that, but it is simple.

As a super-safe simple probably don't need to access for a few years but could if I had to investment, I series bonds make a lot of sense to me as part of a portfolio.

One problem with SPAXX (which I realized when doing my state taxes last week) is that the monthly dividends it pays aren't exempt from state income tax. I expected that they would be, since SPAXX invests in federal-level government bonds, but they aren't.

You probably need to buy bonds issued by your state, although that may increase risk

Treasuries are exempt from state taxes, at least when held directly

> I don't know how much riskier.

Read the prospectus, they are required by law to list all of the known risk(s) in that document.

In general, MMF's are mostly identical to cash, but they do have some quirk(s) that might cause problems, and it should be noted that none of them are FDIC insured, and SIPC insurance(which they will qualify under) is drastically different than FDIC. https://www.sipc.org/for-investors/

The real pro move would have been to create a Stripe payment link for your entire balance (and hit it as many times as you need to up the Stripe transaction maximum), and use your corporate SVB card to pay it all into your Stripe account. That way you don't have to use the bank wire facility, but can use the card networks.

I'm not sure that actually "works" in a situation like this. But it sounds good on paper I think.

Right now, there are checking accounts, savings accounts, CDs, and money market accounts (all of which are deposit accounts) paying 5%.

Not that I don't believe you, but you mind linking some? the best I could find was wealthfront cash, which is isn't a savings account but is giving 4.05% apy. Which is pretty good, but inflation's up at like 6.5%, so it's still a bit of a net loss

I see 4.55% APY: https://www.bankrate.com/banking/savings/best-high-yield-int...

Fidelity SPAXX currently at 4.22% is close enough for me, because you get all the other Fidelity features.

Fidelity FZDXX money market fund 7-day SEC yield is 4.46%. Minimum $100k initial investment.

Some banks do it as a short term loss leader to acquire new customers. Eg Primus bank recently offered 5% interest, then after a month or two their rate fell back down to treasury APRs

Some are listed here: https://www.marketwatch.com/picks/these-8-financial-institut...

I typically check the top rates for savings, checking, and CDs each week. Deals can appear then disappear quickly. The best rates often have restrictions, but not always.

NerdWallet has links to a bunch of high interest (4%+) savings accounts rn.

Lots of banks offer services like these; for example, IntraFi Network Deposits, which is mentioned in the article has more than 3000 members, which is more than 50% of US banks, since there are less than 5000 commercial banks in the US.

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