Introducing the Enhanced Deposit Insurance Program

Protect Your Deposits with Expanded FDIC Insurance

At Rondout Savings Bank we are committed to our customers and the safety of their deposits. During times of economic turbulence, it’s important that our customers have peace of mind knowing their funds are fully protected.

We are pleased to announce the Enhanced Deposit Insurance Program, which gives our customers access to millions of dollars in FDIC insurance on their deposits through one bank relationship at Rondout Savings Bank. The Enhanced Deposit Insurance Program is a fully liquid and automated daily cash sweep that utilizes a network of FDIC insured banks that, together, provide millions of dollars in FDIC insurance coverage.

The Enhanced Deposit Insurance Program is an ideal option for individuals, small businesses and non-profit organizations seeking safety, flexibility, convenience, and daily liquidity.

Program Advantages

  • Access to an expanded level of FDIC insurance
  • Daily liquidity
  • Interest rates that are competitive with other market options
  • FDIC insurance reduces the risks associated with money fund investing
  • Diversification of deposits among several FDIC insured banks.
  • Convenience of one bank relationship and a single point of contact
  • Access online account portal to view summary and balances held at each bank with the ability to opt-out of banks

How It Works

Cash balances in customer accounts are sent daily into the Enhanced Deposit Insurance Program. The program then allocates these balances to deposit accounts at FDIC insured banks in increments below $250,000 so that customers’ balances are FDIC insured up to the program limit.

Graph: First box on the left "customer Deposit $1,000,000, next box to the right "Rondout Savings Bank" next box to the right "Enhanced Deposit Insurance Program" next top box to the right "Bank 1 $250,000" next box below "Bank 2 $250,000" next box below "Bank 39 $250,000" next box below "Bank 40 $250,000" text to the right " Allocates to as many banks as necessary to provide FDIC insurance up to the program maximum

 

FAQs

What is the Enhanced Deposit Insurance Program?

The Enhanced Deposit Insurance Program is a liquid FDIC insured alternative to money market mutual funds. It enables customers of financial institutions participating in the Enhanced Deposit Insurance Program to obtain millions of dollars of FDIC insurance with daily liquidity and potentially higher returns.

What is the FDIC insurance limit in the account?

Joint accounts receive up to $20 million in FDIC insurance and all other account types receive up to $10 million per Tax ID Number. However, individuals in different categories of legal ownership may receive higher amounts.

How are high levels of FDIC insurance achieved?

Cash balances in customer accounts are placed daily into the Enhanced Deposit Insurance Program. These deposits are allocated in increments of no more than $250,000 to multiple program Receiving Banks, which abides by the FDIC pass through insurance provisions established by the FDIC. By allocating deposits to multiple banks, customers receive high levels of FDIC insurance while maintaining daily liquidity and the convenience of maintaining one bank relationship.

When placed into the Enhanced Deposit Insurance Program the following business day, are customers’ deposits insured?

Until the customers’ funds are placed into the Enhanced Deposit Insurance Program, such funds will be uninsured to the extent they remain at their Participating Institution overnight in excess of any FDIC insurance available on balances kept at their Participating Institution. Their funds will be insured on the following business day once transferred to the Program.

What if the customer’s Participating Institution fails?

Assuming that the first $250,000 of the customer’s funds remains at the Participating Institution (and it is an FDIC insured bank) with the remainder placed into the Enhanced Deposit Insurance Program, then the following would occur:
1) An FDIC claim would be filed on behalf of the customer for the $250,000 that remained at the Participating Institution. It typically takes two business days for the FDIC to settle such claims;     but could be longer.
2) The funds placed into the Enhanced Deposit Insurance Program are not impacted. Rather, those funds are placed at other FDIC insured banks and similarly protected by FDIC insurance and   continue to be available to the customer either through: (1) the Participating Institution in a wind-down mode, under the conservatorship of the FDIC, or a transitioning Participating Institution;     or (2) Stable*.

What if the customer does not want their money deposited into the Enhanced Deposit Insurance Program Receiving Bank?

Customers have the option to exclude the Enhanced Deposit Insurance Program Receiving Bank they choose. However, by opting out of one or more of the Enhanced Deposit Insurance Program Receiving Banks, it may affect the maximum amount of FDIC insurance they may receive.

How is the Enhanced Deposit Insurance Program different from a money market mutual fund sweep?

Unlike the Enhanced Deposit Insurance Program, money market mutual funds are not FDIC insured. Operationally the Enhanced Deposit Insurance Program works similarly to a money market mutual fund sweep, however, deposits are placed into insured accounts held at several FDIC insured program banks instead of pooled money fund investments.

What are the advantages of an FDIC insured account versus a money market mutual fund?

  • Provides the safety and explicit guarantee of FDIC insurance backed by the full faith and credit of the US Government that money funds do not offer
  • Eliminates market risks associated with money fund investing
  • Is outside the scope of the SEC’s money fund reforms
  • Offers a highly competitive yield

Can placing funds in the Enhanced Deposit Insurance Program decrease customers’ overall portfolio risk?

Yes. FDIC insured placements reduce the market risks associated with money market mutual fund investing and other direct cash instruments.

 

For more information, please contact Rondout Savings Bank at (845) 331-0073

The Enhanced Deposit Insurance Program is offered to you by Rondout Savings Bank (“us” or “we”), subject to the terms and conditions set forth in the program Terms & Conditions provided to you. Please liaise with us regarding your participation in the Enhanced Deposit Insurance Program, including for the Enhanced Deposit Insurance Program Terms & Conditions, your customer statements and any questions you may have. Please contact us for a list of banks and other institutions into which your funds could be deposited through the Enhanced Deposit Insurance Program. The Enhanced Deposit Insurance Program is administered by Stable Custody Group II LLC (“Stable”)*. Stable* and its affiliates are not depositories, banks or credit unions, and the Enhanced Deposit Insurance Program is NOT, itself, an FDIC insured product. Rather, under the Enhanced Deposit Insurance Program, your funds are swept or placed into deposit accounts at participating banks or other financial institutions that are insured by the Federal Deposit Insurance Corporation (“FDIC”) for up to the current standard maximum deposit insurance amount (“SMDIA”) of $250,000 per eligible depositor, per insured participating institution, for each ownership capacity or category, including any other balances the depositor may hold at that institution directly or through other intermediaries. FDIC insurance coverage is only available to protect you against the failure of a FDIC insured institution, respectively, that holds your deposits under the Enhanced Deposit Insurance Program (and not to protect against the failure of any other party, including Stable*). The Enhanced Deposit Insurance Program is primarily designed to provide administrative convenience to offer expanded FDIC insurance on your funds and is not designed to provide you with investment enhancements, higher rates of returns or profits on your funds.