Got More Than $250k in the Bank? SoFi to Offer up to $2 Million in FDIC Insurance

This post may contain affiliate links which may compensate us based on your interaction. Please read the disclosures for more information.

Image source: Getty Images
What happenedSoFi Checking and Savings members will now have access to up to $2 million in FDIC insurance for deposits. The standard level of protection is a maximum of $250,000 per depositor. SoFi Checking and Savings is making this added coverage available through the SoFi FDIC Insurance Network, a recently created partnership with multiple banks.So whatThe recent banking industry meltdown, fueled by the collapse of Silicon Valley Bank, has many consumers with money in savings accounts wondering if their cash is safe. The good news is that FDIC insurance protects deposits of up to $250,000 per person. But cash reserves beyond that point aren’t covered in the event of a bank failure. Now, SoFi is taking that worry off the table.
Save: This credit card has one of the longest 0% intro APR periods aroundMore: Save while you pay off debt with one of these top-rated balance transfer credit cards
“It’s our goal to help people get their money right, which we know goes hand in hand with feeling good about the safety of their funds,” said Anthony Noto, CEO of SoFi. “By offering access to up to $2 million in FDIC insurance, we are making sure our members have peace of mind about their money at SoFi. We know the last few weeks have been unnerving for many consumers, and we hope this helps.”Now whatThe FDIC does not receive funding to do what it does. Rather, it’s funded by premiums that banks pay for. To keep those premiums reasonable, the FDIC only guarantees coverage of up to $250,000 per depositor. Giants like Chase and Wells Fargo, for example, limit their coverage to $250,000, so SoFi is clearly going above and beyond in this regard.That said, for many savers, protection for up to $250,000 per depositor is more than enough. A 2022 study by The Ascent found that the average savings account balance among Americans is $4,500. Furthermore, savers who have more than $250,000 in cash can look to spread their money across different banks. Now SoFi happens to offer a competitive 4% savings account APY right now, so moving over to SoFi isn’t a bad idea for consumers looking to earn more interest on their money. But those who are happy with their banks don’t necessarily need to rush to switch over to SoFi — especially if they’re earning a competitive APY and are satisfied with other features of their bank, like ATM access and customer service.Given the upheaval the banking industry has experienced over the past few weeks, it won’t be surprising to see more institutions begin to offer FDIC protection beyond $250,000. But for now, that certainly isn’t the norm, so banking customers with extra cash reserves can definitely consider looking to SoFi for optimal protection.These savings accounts are FDIC insured and could earn you 13x your bankMany people are missing out on guaranteed returns as their money languishes in a big bank savings account earning next to no interest. Our picks of the best online savings accounts can earn you 13x the national average savings account rate. Click here to uncover the best-in-class picks that landed a spot on our shortlist of the best savings accounts for 2023.We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Wells Fargo is an advertising partner of The Ascent, a Motley Fool company. JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Maurie Backman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends JPMorgan Chase. The Motley Fool has a disclosure policy. 

What happened

SoFi Checking and Savings members will now have access to up to $2 million in FDIC insurance for deposits. The standard level of protection is a maximum of $250,000 per depositor. SoFi Checking and Savings is making this added coverage available through the SoFi FDIC Insurance Network, a recently created partnership with multiple banks.

So what

The recent banking industry meltdown, fueled by the collapse of Silicon Valley Bank, has many consumers with money in savings accounts wondering if their cash is safe. The good news is that FDIC insurance protects deposits of up to $250,000 per person. But cash reserves beyond that point aren’t covered in the event of a bank failure. Now, SoFi is taking that worry off the table.

“It’s our goal to help people get their money right, which we know goes hand in hand with feeling good about the safety of their funds,” said Anthony Noto, CEO of SoFi. “By offering access to up to $2 million in FDIC insurance, we are making sure our members have peace of mind about their money at SoFi. We know the last few weeks have been unnerving for many consumers, and we hope this helps.”

Now what

The FDIC does not receive funding to do what it does. Rather, it’s funded by premiums that banks pay for. To keep those premiums reasonable, the FDIC only guarantees coverage of up to $250,000 per depositor. Giants like Chase and Wells Fargo, for example, limit their coverage to $250,000, so SoFi is clearly going above and beyond in this regard.

That said, for many savers, protection for up to $250,000 per depositor is more than enough. A 2022 study by The Ascent found that the average savings account balance among Americans is $4,500. Furthermore, savers who have more than $250,000 in cash can look to spread their money across different banks.

Now SoFi happens to offer a competitive 4% savings account APY right now, so moving over to SoFi isn’t a bad idea for consumers looking to earn more interest on their money. But those who are happy with their banks don’t necessarily need to rush to switch over to SoFi — especially if they’re earning a competitive APY and are satisfied with other features of their bank, like ATM access and customer service.

Given the upheaval the banking industry has experienced over the past few weeks, it won’t be surprising to see more institutions begin to offer FDIC protection beyond $250,000. But for now, that certainly isn’t the norm, so banking customers with extra cash reserves can definitely consider looking to SoFi for optimal protection.

These savings accounts are FDIC insured and could earn you 13x your bank

Many people are missing out on guaranteed returns as their money languishes in a big bank savings account earning next to no interest. Our picks of the best online savings accounts can earn you 13x the national average savings account rate. Click here to uncover the best-in-class picks that landed a spot on our shortlist of the best savings accounts for 2023.

We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Wells Fargo is an advertising partner of The Ascent, a Motley Fool company. JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Maurie Backman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends JPMorgan Chase. The Motley Fool has a disclosure policy.

 Read More