How do millionaires protect their deposits over FDIC limits?

Question

If the FDIC only protects 100k per depositor, does that mean a multi-millionaire (say 10 million) has to have separate accounts at 100 different banks to get his FDIC protection?

How do they protect their cash assets?

Answer 1

Best Answer - Chosen by Asker

There is a program called CDAR I believe that will insure for higher amounts. I'm not sure how it works, but I've heard it mentioned a few times.

Someone who has 10 million in cash will not be keeping most of it in a bank, so there's little to worry about.

Asker's Rating:

Asker's Comment:

looked up cdar, great info, thanks!

Answer 2

It isn't just millionaires. Large businesses have over $100,000 in their checking accounts every day. They are constantly receiving payments and paying bills. It isn't practical for them to open accounts in additional banks just to get deposit insurance. In fact, sometimes a large industrial supplier will bill for over that limit in one bill. The company isn't gong to cut multiple checks.

The answer is: they do without the insurance. They do their homework. Large depositors examine the public records of banks and only do business with the largest and most stable banks. The insurance wasn't created to cover everybody, only small depositors who weren't capable of doing the background work. (The original limit was $10,000.)

Source(s):

Commercial bank officer for many years.

Answer 3

Millionaires generally realize that "risk" is a perceived concept, not a real one. No-one actually needs "FDIC protection", it's just there to give a feeling of security to savers who don't understand basic human emotions.

If you put $1000 in a shoebox inside a bank vault (what could be safer?) then 50 years from now you are certain to have $1000, right?

Put it in a "dangerous" & "risky" uninsured place like the stock market, and 60 years from now you'll have about a million dollars.

That's how you protect assets...by understanding reality!

Answer 4

1) Banks are for poor people only. Millionaires do not have bank accounts (Except one with $100,000.00 USD or less for their personal expenses)
2) No
3) They have brokerage accounts and they invest their millions in Mutual Funds, Hedge Funds, Stocks, Options, ETFs, REITs and other investments.

You don't make $1,000,000.00 USD saving your cash in the bank but you will make $10,000.000.00 USD if you use your cash to buy a few shares of Citigroup, Bank of America, JPMorganChase, Wells Fargo, Capital One and other banks.

You can be a shareholder too.

Open a brokerage account at Zecco and buy at least one share each week and you will retire with millions.

I will help you for FREE. (I am a Portfolio Manager)

Answer 5

Millionaires have their money in other places that the bank. Its a lousey place to have money. Their money is mostly in real estate and businesses.