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Comment by o0-0o | Hacker News Reader

I am so done with this bank. Does anyone have a recommendation for a replacement?

What is left of "this bank" if it is owned by another bank? My understanding is that the shareholders were wiped out and the senior management will be different.

I am not at SVB but was considering whether it might make sense to have a second account there, for FDIC-spreading purposes. I have the same knee-jerk reaction as many people, but on second thought I wonder if this is irrational.

Looking at this transaction, I don’t expect the SVB employees to keep their jobs with the exception of those who staff the branches. You’re already at a new bank.

Stop having lots of money in bank accounts. Place the money in other forms of assets.

Take a look at what happened to SVB when they did that.

How would you be subject to a bank run as an individual? Do you hold deposits for others that they can withdraw at any moment?

> Do you hold deposits for others that they can withdraw at any moment?

Yes you do actually. There are many withdrawal events such as taxes, medical expenses, vehicle repair, and others that you need to provide liquidity for in short notice. If your funds are locked into treasuries or other assets that have a low current value relative to their final worth like SVB then you will have to sell them at a loss which might ruin you financially. Unfortunately there's no FDIC for individuals.

> there's no FDIC for individuals.

Yes there is, it is called "insurance" and is readily available from a variety of providers. It is meant precisely to turn unexpected high cost expenses into more predictable expenses over time.

"If your funds are locked into treasuries or other assets that have a low current value relative..."

That's why it's a good idea to pay attention to the term of the bond. You can buy short term treasury funds with yield to maturity of around 30 days. These aren't capable of having low current value compared to final worth. You can also save a little extra money and be capable of taking the risk of a longer term.

If you have more than $250k use a brokerage account, with linked checking account. And hold a simple laddered t-bill portfolio in the brokerage account, you get the $250k fdic insurance on the bank account portion, the sipc on the brokerage portion + excess of sipc insurance coverage (you have to research this, but should cover all but the biggest institutions) + asset segregation (you ostensibly own the bonds and they should not be co mingled).

E*trade example below https://us.etrade.com/l/f/asset-protection

https://mercury.com

Why shouldn’t I use this for personal banking. Sounds great

> Mercury is a financial technology company, not a bank. Banking services provided by Choice Financial Group and Evolve Bank & Trust®; Members FDIC.

Betterment's Cash Reserve[1] might be of interest to you. It's a similar concept, where they spread your deposits among multiple program banks to give you a higher level of FDIC insurance.

[1]: https://www.betterment.com/cash-reserve

I was* a Mercury customer for >1 year, and their product really is excellent. It behaves reliably, has good features. After SVB they enhanced their existing deposit insurance to spread your money across more bank accounts, giving you effectively $5MM of insured deposit coverage. Setup was a snap with them too.

Generally, if Stripe etc claimed the money was on the way, Mercury's app already saw the funds and made them available by the time I received the Stripe email. Underneath the hood its Evolve Bank and Trust (or at least my bank account was).. Mercury is merely the smart software layer on top of the actual bank account they open on your behalf behind the scenes.

* The only slight negative is that they did terminate my account last week - they immediately suspended all in/out transactions with no warning, and said they'd either wire or cut me a check to get my balance out in a few weeks. I think it's because I asked their support a question about bringing one of our other much larger businesses across and so asked some ACH related questions which probably spooked them due to lack of understanding.

I'd use them again quite happily in other businesses though.. just be mindful if they do shut you down you might find yourself unbanked for a period of time... and the wire to get your funds out if they suspend you requires manual approval by someone in Mercury Compliance. The account in question is a SaaS for Franchisor Operations and Franchise Compliance, so we're usually considered quite low risk.. I regret losing my Mercury account, as the alternative (RelayFi) is 'good' but not as good unfortunately.

I wouldn't call this a slight negative

Sounds like at least a medium sized negative to me.

What the hell? This isn't a slight negative, it's a compelling reason to avoid them completely.

A low-risk SaaS business has their account terminated for no reason at all? Good lord, that's not what you want in a bank.

This is one of the worst reviews I’ve read for mercury, despite your positive points. A bank that shuts you down for asking questions is not reliable to do large business with.

A notable option might be one of the many Massachusetts banks affiliated with the DIF, that have unlimited deposit insurance beyond the $250k FDIC limit [1].

Curious to hear if anybody else has gone this route, and what your experience has been.

[1]: https://www.difxs.com/DIF/DIFMemberBanks.aspx

Dif has just 500 million in assets according to their faq. That’s not enough to prevent a SVB magnitude event

Just pick a too big to fail bank and keep your personal deposits under 250k per account.

So, Chase, Citi, BofA.

If your deposits are below the insurance limit, there's no need to deal with a too big to fail bank. Better to go somewhere where interest and service are available.

There is because people couldn't get access to their money while they were sorting it out.

It wouldn't surprise me if FDIC can act quicker in taking over a small bank than a large one, though.

"Historically, the FDIC pays insurance within a few days after a bank closing, usually the next business day, by either 1) providing each depositor with a new account at another insured bank in an amount equal to the insured balance of their account at the failed bank, or 2) issuing a check to each depositor for the insured balance of their account at the failed bank."

https://www.fdic.gov/resources/deposit-insurance/faq/

I do my day to day banking with a too big fail bank. The service is excellent.

And I wonder if this excellent service will continue, once there are only 3 banks left.

Keep my money in an account, let me buy things with pieces of plastic, let me have pieces of paper when I want them, let me send it to other people when I want to and do none of that when I dont want it done.

If you want someone to be glad when you get home and listen to you complain about bill from accounts then get a dog.

Too big to fail means you don't have to worry about nominal insurance limits because failure is impossible.

A problem is, that Small Enough To Fail banks may find it hard to offer competitive services, when they are competing on a slanting field against TBTF banks that don't have to pay the same for their safety nets.

If you want an actual startup-oriented bank that has their shit together (e.g. they employ sweep accounts and by default you have $5M of FDIC insurance), mercury.com has been excellent. Great tech, great UI/UX, great app, transfers are free (ach, check, domestic and intl wires), instant virtual cards, physical if you need it, finely-grained spending limits, etc. They're awesome.

Worth noting mercury is not a bank. They are a tech partner that primarily banks with Evolve.

That shouldn’t dissuade anyone from using them and I have no experience or opinions whatsoever about them. Just mercury isn’t a bank.

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