The Insured Bank Deposit Sweep Program systematically allocates your cash across numerous FDIC-insured program banks to ensure that your eligible balances are fully protected.
For example, a deposit of $750,000 to an individually registered MEXEM account, in which there are no margin requirements and no short stock positions, will be protected as follows: the first $250,000 will be held at MEXEM (subject to SEC-mandated safeguards plus SIPC protection) and the remaining $500,000 will be spread across three program banks. $246,500 will be swept to each of the first two program banks and the remaining $7,000 will be swept to a third program bank.
Sweeping only $246,500 rather than the respective FDIC coverage limit of $250,000 helps to ensure that any accrued (unpaid) interest is also protected by FDIC. Under this example, a subsequent deposit of an additional $50,000 will be automatically swept to the third program bank. Clients may sweep a total of $2,500,000 ($5,000,000 for joint accounts) into the Program.
Combined with existing SIPC coverage on your first $250,000, your total available insurance will cover up to $2,750,000 ($5,250,000 for joint accounts). Cash balances above $2,750,000 ($5,250,000 for joint accounts) remain subject to safeguarding under the SEC's Customer Protection Rule 15c3-3, backed by the firm's equity capital (see our latest earnings release).
If you need to withdraw funds, they will be withdrawn from the last position bank with funds first.
To learn more about this program, please visit the Insured Bank Deposit Sweep Program page on our website.