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Posting as top-level comment because my original post was downvoted a ton for some reason: I like https://mercury.com and have been using them for a few years. It's a bank wrapper, but your money is in a real bank (Evolve bank). [0] I recommend them because: * $1M FDIC insurance for your cash [1] * Business banking features I use work great (paying vendors, receiving wires) [0] https://mercury.com/how-mercury-works […
Posting as top-level comment because my original post was downvoted a ton for some reason: I like https://mercury.com and have been using them for a few years. It's a bank wrapper, but your money is in a real bank (Evolve bank). [0] I recommend them because: * $1M FDIC insurance for your cash [1] * Business banking features I use work great (paying vendors, receiving wires) [0] https://mercury.com/how-mercury-works […
Your original post was probably downvoted because of the referral link.
https://wakatime.com/static/img/ScreenShots/Screenshot%20202...
Edit: Now I notice the "Referral payout" column. I guess that means I get something too, but I didn't think that was the case when posting the link originally.
Seems a lot of people are recommending large banks. That was one of the "fears" I read somewhere this SCB failure will give these big banks more "power". But, I also saw SVB was the 16th largest bank in the US. So going to a big bank mat not be good. Me, I would look into local banks and do some hard work "research" and pick one of them. They tend to be more tuned into you community. Maybe a Credit Union ?
Now banks just originate mortgages and use the standardized underwriting criteria provided by the buyer, usually GSEs.
All other consumer lending is almost strictly driven by credit scores.
Even medium sized businesses now have access to debt and equity markets. There are national companies that specialize in things like factoring.
I guess maybe local banks are still making loans to hyperlocal businesses like pizza shops and hair salons?
What you should worry about is reducing the various risks you face by:
1) Having at least 2 distinct banks with no overlap in who has admin access. This is the most important step. In the US, an insider at your company is way more likely to commit fraud or get phished than your bank failing. Just like you’d never operate your production app from one availability zone, never rely on one bank.
2) If you have $10mm or more, consider having a portion of your funds at each bank going into a money market sweep. These off balance sheet facilities might take a few days or more to access from an operational standpoint during a bank failure, but are not subjected to the bank’s credit risk. However, money markets have their own different risks so I’d never recommend having more than 50% in them.
3) If you have more than 36 months of runway, having a portfolio of T-Bills. While U.S. Treasury Bills are often referenced as “risk free”, that ignores the fact that they can lose resell value, purchasing and holding them often involves some sort of counterparty risk, and there is always operational risk.
Please do not use one of the big four banks. It is just making the system less safe, and there are plenty of times when that decision is going to bite you (a la PPP in 2020).
For specific recommendations:
1) A credit union or community bank with a branch you can readily access. While you should never have to go in-person, it can be really useful to have it as a backup option.
2) If absolutely wanted to go with a big bank, Capital One is not a bad option.
Posting as top-level comment because my original post was downvoted a ton for some reason: I like https://mercury.com and have been using them for a few years. It's a bank wrapper, but your money is in a real bank (Evolve bank). [0] I recommend them because: * $1M FDIC insurance for your cash [1] * Business banking features I use work great (paying vendors, receiving wires) [0] https://mercury.com/how-mercury-works […
The regulation is very light right now on how to handle the situation when a fintech partner goes under (although is an area of focus and should mature over the next few years.
Earlier quoted context omitted.
Your original post was probably downvoted because of the referral link.
Why? It's $100 for you and nothing for me, I think. Here's what I see on that page: https://wakatime.com/static/img/ScreenShots/Screenshot%20202... Edit: Now I notice the "Referral payout" column. I guess that means I get something too, but I didn't think that was the case when posting the link originally.
As long as it is not First Republic Bank or Signature Bank, I wouldn’t overthink the decision too much. What you should worry about is reducing the various risks you face by: 1) Having at least 2 distinct banks with no overlap in who has admin access. This is the most important step. In the US, an insider at your company is way more likely to commit fraud or get phished than your bank failing. Just like you’d never o…
The interest rate risk on 4 week treasuries is almost nothing and if you have a four week ladder, 1/4 of your money is always less than a week away.
They are currently yielding 4.66%.
Posting as top-level comment because my original post was downvoted a ton for some reason: I like https://mercury.com and have been using them for a few years. It's a bank wrapper, but your money is in a real bank (Evolve bank). [0] I recommend them because: * $1M FDIC insurance for your cash [1] * Business banking features I use work great (paying vendors, receiving wires) [0] https://mercury.com/how-mercury-works […
I'd be very wary of using a fintech as your window to a real bank. Mercury as a company is much more likely to fail than a bank. In that scenario, you are going to face a similar operational disruption as folks are facing with SVB today. You might go several days or even weeks without the ability to access your funds. The regulation is very light right now on how to handle the situation when a fintech partner goes un…
A systematically important bank. They are subject to the most regulation (small, regional, and credit unions lobbied for looser rules) and have an implicit government backstop. The top 3 are JPM-Chase, BoA, and Citi.
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Just for the record JPM Chase absolutely does bank startups. https://www.jpmorgan.com/commercial-banking/startups
