How are Market Savings deposits FDIC insured and, at the same time, Save invests on my behalf?

Modified on Fri, 13 Oct 2023 at 01:52 PM

We utilize two accounts; one deposit account with our partners at Webster Bank, N.A., Member FDIC, and one investment account with our partners at Apex Clearing Corporation. For the Market Savings program, all cash deposited by customers is placed in an FDIC-insured bank account3 and is not used to fund investments and is therefore not at risk of loss. It is important to note that Save is not a bank, but we partner with FDIC-insured member banks.

This allows the principal to be FDIC-insured,3 and invest equivalent portfolio investments at the same time. What we mean by equivalent portfolio investments is essentially taking the economic value of your deposits and purchasing an equivalent investment on your behalf.  Save buys strategy-linked securities whose value is equal to the notional value of the purchased strategy-linked security. The notional value accounts for the total value of the position, vs. market value which is the price at which that position can be bought or sold in the market.

Any equivalent investment is funded by Save partner banks, not from customer deposit accounts, and there is no requirement for customer outlay of their own capital. 

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