What are Network Deposits and How Do They Work?

Commercial customers with larger balances often must choose between uninsured deposit exposure or account fragmentation, where their funds are split between different banks. A commercial customer with a $2 million deposit from an asset sale represents both an opportunity and a risk. While they may enjoy a strong relationship with their primary bank, the reality of $250,000 FDIC deposit insurance limits often pushes these customers toward larger institutions that offer expanded insurance coverage.

What Are Network Deposits?

Network deposits work by distributing a customer’s funds across multiple FDIC-insured institutions, with each placement in increments of up to $250K per customer identifier (e.g., TIN), per receiving institution. When an institution deposits $2 million in customer funds, a network administrator manages the placement across multiple participating receiving institutions, providing access to FDIC insurance coverage on that deposit, up to the program limit.

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