We do love it when someone refers a family member or friend to us. Sometimes the question is, “How can we introduce them to you?” Well, there are multiple ways but a very easy way is to simply forward them a link to this webpage.
Here are this week’s items:
Portfolio Update: Murs and I have recorded our portfolio update for October 7, 2024
Retirement and The Power of FDIC Coverage and Competitive Rates
Radon and Murs discuss an exciting new partnership with Flourish Cash, a high-yield, FDIC-insured cash management account offering competitive rates and massive FDIC coverage. Special guest Ben Cruikshank from Flourish Cash joins the conversation to explain…
Retirement and The Power of FDIC Coverage and Competitive Rates
When it comes to protecting your hard-earned money, there’s often a fine line between liquidity and earning a competitive return. Whether you’re looking to secure your savings for the long term or need a reliable place for large sums temporarily, the traditional banking system can seem inadequate. FDIC coverage, for example, typically…
When it comes to protecting your hard-earned money, there’s often a fine line between liquidity and earning a competitive return. Whether you’re looking to secure your savings for the long term or need a reliable place for large sums temporarily, the traditional banking system can seem inadequate. FDIC coverage, for example, typically caps at $250,000 per depositor per institution, leaving individuals or businesses with large deposits in a bit of a bind.
But imagine a solution that not only ensures full FDIC coverage for deposits far exceeding that cap but also offers competitive interest rates on your savings—without requiring a minimum balance. That’s precisely the kind of financial peace of mind that Flourish Cash, a new high-yield FDIC insured account, offers. At Peace of Mind Wealth Management, we recognize the importance of having secure, liquid savings options as part of your broader retirement strategy. Flourish Cash, through its innovative partnership with a network of banks, provides a seamless, secure, and highly liquid solution for individuals and businesses alike. Let’s dive into why this could be a game-changer for your savings and retirement planning.
What is Flourish Cash?
Flourish Cash is a technology-driven solution designed for individuals who want more than what traditional savings accounts can offer. Flourish isn’t a bank itself, but it works with a vast network of over 25 partner banks, allowing it to provide FDIC insurance for deposits up to $5 million per person, $10 million for joint accounts, and even $5 million for business accounts. That’s a significant leap from the standard FDIC limit of $250,000.
Here’s how it works: when you deposit funds into your Flourish Cash account, the platform distributes those funds across multiple partner banks. For example, if you deposit $1 million, Flourish will automatically allocate your funds into $250,000 increments across four banks, ensuring that your entire deposit is covered by FDIC insurance.
Beyond the security, Flourish Cash offers competitive interest rates, and there are no minimum balance requirements. Whether you have $10,000 or $1 million in your account, you’ll earn the same attractive rate without any hidden fees or conditions. This offers a smart and secure way to optimize your cash holdings as you prepare for retirement.
The Problem Flourish Solves
For many people, the security of FDIC insurance is paramount, but that security often comes at a cost. Let’s say you have $500,000 in cash that you don’t want to invest right now, but you need it to be liquid. At traditional banks, you’d have to spread that amount across at least two banks to ensure full FDIC coverage. Managing multiple bank accounts is cumbersome, and it’s even more frustrating when those accounts are offering interest rates barely above zero.
This is especially true for individuals who may have a large influx of cash—such as proceeds from selling a house or an inheritance—who are not ready to invest immediately but want a competitive return in the interim. Flourish addresses this exact problem by providing not only high-yield FDIC insured accounts but also the convenience of a single platform that manages it all seamlessly. This can be an essential strategy for protecting your wealth.
Flourish: The Technology Behind the Platform
Flourish Cash isn’t just a savings account—it’s a fully optimized cash management solution designed for flexibility and ease of use. As Ben Cruikshank from Flourish explains, the service operates as a “cash sweep program” that moves funds between a network of banks on your behalf. This means that while you interact with one simple, user-friendly online platform, the behind-the-scenes mechanics ensure your deposits are fully insured and earning a competitive rate.
And it’s not just for personal accounts. Flourish Cash offers solutions for businesses, revocable trusts, LLCs, and nonprofit organizations. Whether you’re a small business owner or managing a family trust, you can benefit from Flourish’s high FDIC coverage and competitive rates—advantages that are rarely available to business accounts in traditional banks.
FDIC Coverage for Large Deposits: A Game-Changer
One of the most unique and powerful features of Flourish Cash is its ability to provide FDIC coverage for deposits up to $5 million per individual account. Most people are familiar with the standard $250,000 FDIC insurance limit, but for those with more significant cash holdings, exceeding that limit can be risky.
In traditional banks, if you want to keep more than $250,000 fully insured, you’d need to open multiple accounts at different institutions. Not only is this a logistical hassle, but it also dilutes the interest you might earn, as you’re forced to scatter your savings across accounts with varying rates.
Remember, Flourish Cash will spread your funds across multiple FDIC-insured banks automatically, ensuring that all your money is covered without any effort on your part. Whether you’re managing personal, joint, or business accounts, the ability to maintain liquidity while keeping your savings secure is a game-changer. This makes it a valuable resource for those managing large retirement savings.
Competitive Interest Rates and No Minimum Balances
Another major advantage of Flourish Cash is its competitive interest rates. In an era where traditional savings accounts often pay close to zero, Flourish offers a yield that’s far more attractive. As we mentioned, there are no minimum balance requirements and on top of that, you’ll earn the same competitive rate whether you’re holding $10,000 or $1 million in your account.
This makes Flourish Cash an ideal solution for those who want their savings to work harder for them without being locked into long-term commitments like certificates of deposit (CDs). With Flourish, your money remains fully liquid, and you can access it when you need it, often within one business day.
Smart Features for Managing Your Money
Flourish has some clever smart features to help you manage your cash more efficiently. One standout feature is “Smart Balance,” which allows you to set a target balance for your primary checking account. If your checking account falls below that threshold, Flourish will automatically transfer funds back to maintain the balance. If your checking account exceeds the threshold, Flourish will move the excess into your Flourish Cash account, where it can earn a higher rate. This feature is especially good news for those who like to maintain a cushion in their checking account for day-to-day expenses but don’t want to miss out on the higher interest rates offered by Flourish Cash.
How to Get Started with Flourish Cash
Flourish Cash is an invitation-only service offered exclusively through financial advisors, including Peace of Mind Wealth Management. If you’re interested in securing your cash with FDIC coverage and earning competitive rates, contact us to provide you with an invitation to open an account. The sign-up process is quick and easy, taking most users less than five minutes to complete.
Once your account is set up, you can link it to your existing checking or savings account and begin transferring funds with just a few clicks. Flourish offers ACH and wire transfers, and they’ve recently introduced same-day ACH transfers, allowing you to move funds back to your checking account in as little as a few hours.
A Powerful Tool for Retirement Planning
Flourish Cash isn’t just for those with large, short-term cash needs—it’s also an incredibly useful tool for retirement planning. Whether you’re saving for a short-term goal, building an emergency fund, or looking for a secure place to park your cash as you transition into retirement, Flourish Cash offers flexibility and peace of mind. Peace of Mind Wealth Management frequently recommends this tool as part of a broader cash flow strategy for retirement.
Retirees can benefit from Flourish’s high-yield accounts. With the ability to maintain liquidity and full FDIC coverage, retirees can keep their cash secure while still earning a competitive return, helping to protect their savings from inflation and market volatility.
Conclusion
Flourish Cash is a smart, secure, and highly competitive solution for managing your savings. Whether you’re looking for FDIC coverage for large deposits, high-yield savings with no minimum balance, or a cash management tool that seamlessly integrates with your existing financial accounts, Flourish delivers.
At Peace of Mind Wealth Management, we believe in finding solutions that fit your financial goals. If you want to understand all this a little better, we offer a complimentary phone call that you can schedule with us on our website. If we can’t answer all your questions in just 15 minutes, we’ll guide you to the next steps to find the answers you need.
We do love it when someone refers a family member or friend to us. Sometimes the question is, “How can we introduce them to you?” Well, there are multiple ways but a very easy way is to simply forward them a link to this webpage.
Here are this week’s items:
Portfolio Update: Murs and I have recorded our portfolio update for May 28, 2024
What’s The Difference Between FDIC and SIPC in Retirement?
Radon and Murs discuss the difference between FDIC (Federal Deposit Insurance Corporation) insurance and SIPC (Securities Investor Protection Corporation) insurance. Both FDIC and SIPC offer protection of funds held in accounts at financial institutions like Charles Schwab or Fidelity.
What’s The Difference Between FDIC and SIPC in Retirement?
We aim to address topics on the Secure Your Retirement podcast that people have asked us about. Recently, we’ve been receiving questions about whether the funds in Schwab, Fidelity, etc., are insured.Some accounts, if they are bank-related, are ……
We aim to address topics on the Secure Your Retirement podcast that people have asked us about. Recently, we’ve been receiving questions about whether the funds in Schwab, Fidelity, etc., are insured.
Some accounts, if they are bank-related, are FDIC-insured.
If the account is not bank-related, it will not be FDIC-insured. We need to really think of these as two separate entities:
In most cases, your will have money in both of these types of accounts (realizing there are other options outside of these two as well). Both are fundamental in your retirement planning but are also very different.
What is FDIC and Why Was It Put in Place?
The Federal Deposit Insurance Corporation (FDIC) made headlines last year when regional banks like Silicon Valley Bank (SVB) started having issues. Businesses and individuals had a lot of money in SVB, and this sparked a relevant interest in the FDIC.
In the 1920s and 1930s, bank failures led to people losing money and savings.
In response, the government started the FDIC to protect the public. If the bank does something wrong or there are other issues, people would be covered up to a certain dollar amount by the FDIC.
The FDIC covers up to $250,000 per person. If you have $250,000 in your own savings account, you can be confident that up to this amount is covered by the government.
During the SVB debacle, FDIC was extended up to $1 million.
Why?
The FDIC is a way to make consumers feel more comfortable with the banking system. With account titling, you can cover a lot of your assets with FDIC.
You can receive coverage for (talk to your banker to do this properly) :
Different account registrations can help you cover your money in multiple accounts with FDIC. If you have bank accounts with ten different banks, each account can be covered by FDIC. If you have more than $250,000 at one bank, work with a banker to see options to extend FDIC coverage.
When you work with a bank for your investment, the investments and securities do not fall within the FDIC. Cash in the bank falls under FDIC, but investments do not.
Investments have risks, and since this is the nature of investments, the government does not cover these funds. Enter SIPC.
What is SIPC?
SIPC stands for Securities Investor Protection Corporation. If you’re a securities company, such as Schwab or Fidelity, you have SIPC protection.
Why?
SIPC protects you from a different side of things compared to FDIC. Custodians, such as Schwab and Fidelity, allow you to invest money in stocks, mutual funds and so on, but you’re not invested in these companies.
Instead, you invest through the custodian. You can move all your investments to another custodian whenever you like.
If you want to see your stock in one of these custodian accounts, and the custodian cannot find the stock or the investment you made, this is where SIPC comes in. SIPC protects against these types of clerical errors.
You can lose 90% of your investment in a stock because the company is going bankrupt, and there is no insurance for this risk. However, if the investment is lost because of a custodian error, SIPC will offer up to $500,000 per person in protection.
If Schwab went out of business, SIPC would put forth the money to help you find your:
In the market, you can lose your money. A custodian’s purpose to provide a place to park your investments like a parking garage’s purpose is to give you a place to park your car. If those investments are somehow lost, SIPC does offer some protection to help find your “lost car”.
Financial planning with the right strategies in place provides you with peace of mind that your money and investments have the maximum amount of protection possible.
Do you have questions about your financial plan or about FDIC and SIPC?
