The Debate Over Universal Deposit Insurance for Banks

Fintechs such as SoFi, Mercury, and Crescent are offering deposit products that provide more than the standard $250,000 insurance guaranteed by the Federal Deposit Insurance Corp. (FDIC) to attract customers concerned about the limited insurance. SoFi is providing $2 million in insurance, while Mercury is offering up to $5 million in FDIC insurance for its customers through its Mercury Vault. Crescent also debuted a similar product, Crescent Cash, to offer customers access to over $75 million in FDIC protection. These offerings are aimed at start-ups and small business operators that need to stash away more than the $250,000 limit.