By now, we are sure, most of you have read about Silicon Valley Bank and Signature Bank’s rapid collapses. Many of you may be wondering what this means for you. The general sentiment is that this appears to be an isolated event, limited to a few smaller banks, and does not appear to be a more systemic situation. While a bank failure can be scary – especially for those who remember the financial crisis of 2008 – the ramifications for individuals and markets overall may be limited. As of Monday morning, there are assurances that all depositors of these banks will be protected and made whole through a new backstop program. This program, which was announced by Federal Reserve Chairman Jerome Powell jointly with Treasury Secretary Janet Yellen and FDIC Chair Maritn Gruenber, outlines measures that are intended to shore up public confidence in the wake of the collapse of both banks. We are expecting some volatility in markets as this unexpected information continues to be priced into the market.
In light of these events, we thought it a perfect opportunity to provide our clients with a quick refresher on FDIC insurance as well as insight into how Fidelity Institutional specifically, protects its clients’ assets.
Key Facts about FDIC Insurance:
  • The FDIC insures up to $250,000 per depositor, per institution, and per ownership category
  • If a bank is federally insured, it will have the FDIC insurance logo on its website
  • FDIC insurance covers checking, savings, and money market accounts as well as Certificates of deposit, cashier’s checks, and money orders.
Fidelity Investments as your Custodian:
  • Fidelity has over 75 years of financial management experience and is one of the largest mutual fund companies in the US and a leading provider of workplace retirement savings plans.
  • As a privately owned company, decisions are based on long-term benefits, not short-term gains. Investment banking services such as using firm capital for investment opportunities, raising capital, or advising and managing mergers and acquisitions are not provided by National Financial Services LLC.
  • NFS practices with strict adherence to industry regulations and is subject to the rules and regulations of the SEC, NYSE, and FINRA. There are also internal organizations whose primary mission is protecting Fidelity’s businesses and client assets:
  • Risk Oversight – They review, develop and implement processes to protect Fidelity and its clients.
  • Fidelity Corporate Audit – Ensure the effectiveness and efficiency of Fidelity’s internal controls.
  • Corporate Security – Provides site security, pre-employment screening, and due diligence for business alliances.
  • Corporate Compliance – Help ensure Fidelity’s businesses are in compliance with all industry regulatory requirements.
We work with clients to ensure their deposits are within the protection limits of FDIC. If you have any questions or concerns please don’t hesitate to reach out to us.