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As a small business owner, you work hard for your money and want to make sure your funds are safe while also earning interest. The Federal Deposit Insurance Corporation (FDIC) insurance takes care of your funds once they’ve been deposited. However, there are certain instances where you may need to expand your FDIC insurance coverage. That’s where Insured Cash Sweep (ICS) accounts come in. They help you maximize your funds and keep your money protected, all while doing business with your community bank. Northwest Bank is now offering this service to help you access millions in FDIC insurance through ICS via the IntraFi® NetworkSM.
In this article, we’ll walk through the frequently asked questions about this unique service.
1. What Is ICS?
ICS is a financial product offered by banks in the IntraFi Network that allows you to secure large deposits while still maintaining access to your funds. If your small business uses ICS to place funds, the deposit is divided into amounts under the standard FDIC insurance limit of $250,000 and placed in deposit accounts at other FDIC-insured banks that participate in the same network. Currently, there are more than 3,000 banks that participate in the IntraFi Network. Although your funds are divided among different financial institutions, the total amount of your deposit with ICS goes to your primary bank. Your bank is responsible for overseeing your ICS deposits and withdrawals.
2. Who Should Use ICS?
Any small business, including a nonprofit, looking to diversify funds to meet long-term financial goals can benefit from ICS. It can help you increase cash and replace other costly diversity funding options. It is also an excellent program for businesses who want to work with a bank that they trust while still receiving the benefits of working alongside a network of FDIC-protected members.
3. What Are the Benefits of Using ICS?
With ICS, the biggest benefit is having peace of mind knowing your funds have maximum FDIC insurance coverage. In the unlikely event that one of these banks experiences a failure, the FDIC provides insurance to keep your money secure and accessible. Along with being fully insured, you work with your primary bank, which saves you time and makes it easier on you and your small business.
Another advantage is having simple access to your funds. While each bank is different, at Northwest Bank you can make unlimited withdrawals when your ICS account is attached to a demand deposit account – a checking account – or money market account. With a money market account, you do have to pay a small fee if you go over six program withdrawals per statement cycle. You can put your money in one or both types of deposit accounts to best match your cash management needs. And, if you are used to collateralization, you can reduce the need to track collateral on an ongoing basis. Finally, ICS accounts earn interest, so you can still benefit from a competitive interest rate.
4. How Do I Keep Track of My ICS Account Balance?
You will receive a monthly statement from Northwest Bank showing your ICS deposit balances. You can check your ICS statement, interest earned and other important information online anytime through a secure system called the Depositor Control Panel. This system allows you to see how and where your funds are being collateralized.
5. How Do I Get Started With ICS?
It’s easy to get started with ICS. Here are the simple steps:
- Visit any Northwest Bank branch location to meet with a Treasury Management Representative and sign an ICS Deposit Placement Agreement and a custodial agreement.
- Identify a checking or money market account to attach the new ICS account. You may select an existing account or set up a new one to be used with each ICS option you choose.
- Your funds are placed into insured deposit accounts at other IntraFi Network banks.
A Northwest Bank Treasury Management Representative can help you get started with ICS and help you find the best treasury management service to serve your small business needs. Contact our Treasury Management team today to learn more about this exclusive service.
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