The term Institutional Deposits Corporation (IDC) refers to an organization that allows investors to make large deposits and still receive Federal Deposit Insurance Corporation (FDIC) insurance for the entire amount. Founded in 2000, the IDC oversees the Money Market Account Xtra (MMAX) program, which provides depositors with an efficient way to make large deposits and secure FDIC insurance.1 The IDC network essentially splits up vast deposits of money among various banks to keep each bank under the protection limit to stay insured by the FDIC.
As mentioned above, the Institutional Deposits Corporation is an organization that looks after large deposits, while providing them protection against losses if their banks fail. Large depositors can make a deposit with the IDC, which divides it up through a network of large banks, which allows for FDIC coverage. This network of large banks makes it easier for the government to secure large, individual deposits. Banks included in the IDC network have to be capitalized, per the FDIC’s mandated financial ratios.
Custodians, such as Wells Fargo and Pacific Coast Bankers’ Bank in San Francisco, California, manage the MMAX structure. As of 2011, the massive amount deposit limit is $250,000 per bank.2 Prior to the existence of the IDC, each deposit was insured for up to $250,000. Any deposits over that amount would not receive FDIC protection.
The IDC network now splits up more massive deposits between banks. Each bank gets $250,000, so insurance can be guaranteed.3 The FDIC protection applies to qualified accounts, so if you have up to that amount in a bank account and the bank fails, the FDIC makes you whole from any losses you suffered.