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#2216420 - 06/25/19 07:09 PM Large Deposit
Anonymous
Unregistered

I have not seen this asked before but here goes.

Prospective customer called me and asked what the FDIC insurance limits were for account holders. Plain and fairly simple question to answer. Now come the part I do not have an answer to and my boss could not tell me either. This is after almost 40 years in banking.

Prospective customer is coming into a LARGE sum of money. Close to the $1 Billion dollar amount. Around here there are only 2 or 3 banks that could take that on deposit without affecting their capital to asset ratios. Now comes the question that I had never heard asked before.

How can 1 person have all their money, say $500,000,000.00 in a bank FDIC insured? Everyone he has spoke to says you are limited to $250,000.00 and then the additional add-ons to get it insured but not the full %500 million. Everyone has told him he would have to take it to several (around 25 - 50) banks to insure the whole amount.

His other question is, how does Ford, Microsoft and other Fortune 50 companies insure their deposits in banks? He feels there has to be a way to put all of this money say into CD's and Money Markets and be totally insured.

He is scared to death that he will lose it if not fully FDIC insured.

Any thoughts.

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#2216434 - 06/25/19 08:29 PM Re: Large Deposit Anonymous
RockChucker, CAMS Offline
Diamond Poster
Joined: Jul 2013
Posts: 1,644
The Country
Take a look at CDARS. Its somewhat involved but for 1 Billion I'm sure you'll get that. That said, I've never hear of anyone with those funds that is silly enough to want anything even close to that in a bank sitting getting minimal return.
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#2216436 - 06/25/19 08:35 PM Re: Large Deposit Anonymous
MScarn6942 Offline
Platinum Poster
Joined: Aug 2015
Posts: 756
Land Lacking in Lakes, IL
To your question about Fortune 50 companies though - most of them don't have it totally insured. While most of them deal with multiple banks, they're looking to the strongest banks in the nation to hold their money because of the risk of an outright failure where they'd lose everything that's not insured is very low. It's a risk-assessed decision.
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#2216437 - 06/25/19 08:38 PM Re: Large Deposit Anonymous
osucpa Offline
Diamond Poster
Joined: May 2011
Posts: 1,400
Agree with Rock. Look at the CDARS program, I believe they do have a limit in there program. There is a cost to the bank for participating. Depending on where you live, I assume this individual might be familiar to someone in the bank.

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#2216439 - 06/25/19 08:40 PM Re: Large Deposit MScarn6942
RR Sarah Offline
Diamond Poster
RR Sarah
Joined: Mar 2004
Posts: 2,487
Up North
I think you should encourage him to speak with a financial advisor.
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#2216454 - 06/25/19 09:54 PM Re: Large Deposit RockChucker, CAMS
Anonymous
Unregistered

He has talked to several investment firms and they have all upset him. They want him to invest in insurance companies and things like that with absolutely no protection. He stood up and left one meeting telling the three investment counselors that he knew more than them. He definitely is a case.

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#2216457 - 06/25/19 10:09 PM Re: Large Deposit Anonymous
Anonymous
Unregistered

Rock thank you, I will. I never had a dealing with that, CDARS, as most of our account holders rarely passed a half million dollars. A couple over a million.

Mscam he really doesn't understand this. He is so afraid of losing what he is gaining. I told him if he put his money into Chase, Bank of America, BB&T or US Bank to name a few he would not have to worry so much as putting it in a smaller state chartered bank. One bank he talked to told him they could not take any of his money as it would screw their asset to capital ratio. They are a very small community bank.

Osucpa. Not really known by a lot as he was just a run of the mill average guy who came into thousands of acres of gas an oil rich land. He and his buddy actually did not know what they had until the local government where the property is located kept trying to find ways of taking it away from them. Once they investigated it they have had offered from around the world for the property because of it's immense value. I did not know him at all. My boss had talked to him a time or two until a good friend of mine asked me to talk to him. Really down to earth guy that wants to protect what he is going to get. I told him let the purchasers wire the money into the bank he is going to deal with and then sort out where he wants to invest. US Treasuries, Bonds, and other things. But he wants it all insured soon as it hits the bank.

RRSarah. I commented above to you but it did not quote you. The ones he has met with knew less than him. No joke. He told them to their faces they were jokes. I only met with him because of a favor to a close friend. My boss had already talked to him and told him he could not help him.

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#2216458 - 06/25/19 10:26 PM Re: Large Deposit Anonymous
Rocky P Offline
Power Poster
Joined: Jun 2003
Posts: 7,398
Florida
Cash and CD's are fine, but they will be losing money. Not only is the interest below inflation rates, but the interest is also taxed. For that amount, at only a 2% return, they would be paying taxes on $20,000,000.

They definitely need to see a competent estate/financial planning attorney, CPA and financial adviser at a BoA, Chase, Schwab, Vanguard, etc. to identify risks, diversify their portfolio, etc. Keeping it fully in cash should not be an option

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#2216465 - 06/25/19 11:17 PM Re: Large Deposit Anonymous
rlcarey Offline
10K Club
rlcarey
Joined: Jul 2001
Posts: 79,280
Galveston, TX
First off. On what date did this unsophisticated customer indicate the billion dollar wire was arriving from the people that promised him from that email he got after he sent them $5,000 to pay the wire taxes? Who is kidding who here? Nobody just gets a billion dollars dumped in their laps without significant financial savy.
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#2216467 - 06/25/19 11:54 PM Re: Large Deposit Anonymous
OldeTymeBanker Offline
Member
Joined: Mar 2016
Posts: 55
I agree with above about asking more questions about the source of this windfall.

Some banks do offer sweeps for personal accounts, and if you have an option for a sweep invested in US Gov't instruments that could be a peace of mind solution, but it's not really common for personal accounts unless you have a wealth management department that offers such.

I can't really fathom someone wanting that amount of money just sitting in traditional bank accounts. Having said that, I do have a few wealthy clients who have CDs at every bank in town just for this reason. Seems exhausting trying to keep track of all of it.
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#2216469 - 06/26/19 04:26 AM Re: Large Deposit rlcarey
Anonymous
Unregistered

Originally Posted By rlcarey
First off. On what date did this unsophisticated customer indicate the billion dollar wire was arriving from the people that promised him from that email he got after he sent them $5,000 to pay the wire taxes? Who is kidding who here? Nobody just gets a billion dollars dumped in their laps without significant financial savy.


He and a buddy were left a tract of real estate from and dead relative. They thought it was just a few hundred acres. Ended up being over 20,000 acres that enveloped a whole town and is very rich in minerals. They did not find out until after he went and investigated why they kept getting huge property tax bills. Every time they turned around the town's government was sending them a bill to "fix" something or for taxes due. So he traveled to the town. After investigating in the local records clerk files he went back to his hotel. Someone during the night slipped in paperwork that told him where to look for the whole amount that they owned. He did. Instead of a few hundred acres it turned into over 22,000 acres. It also included many of the town's governmental buildings which the old man that died owned.

His money should be arriving one day next week, he is hoping Tuesday. They are signing all the paperwork on Tuesday, July 2nd but he is not sure how payment is being made. He already has formed a LLC and all to keep someone from filing lawsuit against him to get money from him.

He has his ducks in a row but has no clue how to invest the money. The ones he has talked to have really been pathetic. One told him to sink the majority of his money into insurance companies like State farm and Nationwide and such. Not a chance on my belief. One big disaster and he would not have anything left.

He does want it to be invested as tax free as possible but getting him help has been difficult. He really does not want to leave our area and travel to where the big banks are.

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#2216470 - 06/26/19 04:35 AM Re: Large Deposit Anonymous
Anonymous
Unregistered

Originally Posted By rlcarey
First off. On what date did this unsophisticated customer indicate the billion dollar wire was arriving from the people that promised him from that email he got after he sent them $5,000 to pay the wire taxes? Who is kidding who here? Nobody just gets a billion dollars dumped in their laps without significant financial savy.


By the way. The company has already deposited $10 million into his account as good faith. No it is not a Nigerian scam. His lawyers are taking care of all the transfers but he did not want all his money kept in PA he wanted them closer to home. He has "savy" as you say because he has 2 other buyers waiting to purchase if the first one walks away. That is why the first one deposited the money into his account to hold it. he keeps the $10 million whether they buy it or not.

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#2216485 - 06/26/19 01:50 PM Re: Large Deposit Anonymous
HappyGilmore Offline
10K Club
Joined: Jun 2004
Posts: 19,483
Pulling people out of the ditc...
plain and simple, there is no way to insure over a billion dollars in any one bank...and he probably doesn't want to open accounts at 2,000 banks to split it out to ensure coverage. and yes, many smaller community banks wouldn't want a huge deposit because of ratios.

he should visit Switzerland and have conversations with some of their banks (or some that have branches in the US), not as a method of avoiding taxes and such in the US, but if you are going to be one of the super rich, you need to talk with banks that have more customers along this line than a run of the mill community bank and know how to bank them.
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#2216518 - 06/26/19 03:47 PM Re: Large Deposit Anonymous
HappyGilmore Offline
10K Club
Joined: Jun 2004
Posts: 19,483
Pulling people out of the ditc...
just a couple of lingering questions:

1. he thought he inherited a couple of hundred acres but it is 22,000. how does one get confused about that? with something of this large value, surely there was probate and the attorney would have spelled out what he was inheriting
2. relative left the property to "him and a buddy". why would the buddy be included? seems odd
3. property includes many of the town government buildings...so where is the rent for those going?
4. in the middle of the night at the hotel someone slipped him paperwork telling him where to go look for the entire amount he owned? yeah, nothing fishy about this
5. property tax bills are sent annually, with one reminder notice when coming late (at least that is my experience), and includes what the property description is, so not sure why "every time he turned around the town was sending him notices or bills of things to "fix" or tax bills or why he didn't realize what he owned
6. he has all his ducks in a row but doesn't know when the money is coming?
7. you say he is a prospective customer but the $10,000,000 is already deposited into his account. doesn't sound prospective to me, sounds like an established customer.
8. he keeps the $10,000,000 whether the "buyer" buys the property or not?
9. he is going to get over a billion dollars but doesn't want to go to where the big banks are to deal with it?

way too many flags in this story to make me think there is any credibility to it whatsoever. but let me know next tuesday if he shows up with a check for a billion dollars to deposit, or if you get an incoming wire for the same amount...

thank you for the wednesday morning laugh.
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Providing alternative truths since the invention of time

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#2216553 - 06/26/19 06:54 PM Re: Large Deposit HappyGilmore
Comply 101 Offline
Platinum Poster
Comply 101
Joined: Jul 2001
Posts: 708
He is telling the truth. I had this happen to me one time as well.
Then I woke up.
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#2216559 - 06/26/19 07:32 PM Re: Large Deposit HappyGilmore
Anonymous
Unregistered

Originally Posted By HappyGilmore
just a couple of lingering questions:

1. he thought he inherited a couple of hundred acres but it is 22,000. how does one get confused about that? with something of this large value, surely there was probate and the attorney would have spelled out what he was inheriting
2. relative left the property to "him and a buddy". why would the buddy be included? seems odd
3. property includes many of the town government buildings...so where is the rent for those going?
4. in the middle of the night at the hotel someone slipped him paperwork telling him where to go look for the entire amount he owned? yeah, nothing fishy about this
5. property tax bills are sent annually, with one reminder notice when coming late (at least that is my experience), and includes what the property description is, so not sure why "every time he turned around the town was sending him notices or bills of things to "fix" or tax bills or why he didn't realize what he owned
6. he has all his ducks in a row but doesn't know when the money is coming?
7. you say he is a prospective customer but the $10,000,000 is already deposited into his account. doesn't sound prospective to me, sounds like an established customer.
8. he keeps the $10,000,000 whether the "buyer" buys the property or not?
9. he is going to get over a billion dollars but doesn't want to go to where the big banks are to deal with it?

way too many flags in this story to make me think there is any credibility to it whatsoever. but let me know next tuesday if he shows up with a check for a billion dollars to deposit, or if you get an incoming wire for the same amount...

thank you for the wednesday morning laugh.


It is the truth. No falsehoods or made up stories.

1. The relative did not disclose what all was included as I am understanding. Just property in and around the town it is located at.
2. Both of them took turns taking care of the old man until he passed away suddenly. Old man took care of all his stuff. They knew he owned property but just was never told how much.
3. From what I gathered in talking with him it is going into a separate account. The money there is being kept to pay taxes and expenses on said properties.
4. He did not know whom it was but the person identified themselves as a close friend of the old man and he did not want to see the "town leaders" steal property that they knew nothing about. I am not sure but it was listed in another name or company name.
5. I know this is the way it is supposed to work but for some unknown reason, because he is selling all the property to another corporation that the town will have to answer to, they have been nickel and diming him any time they get a chance. He just got a "new tax bill due" just last Friday. He sent them the money.
6. Signing papers on Tuesday, July 2nd. They also get their money that day. Depends on how they pay. Either wire transfer or check. Bank has already told him up to a 3 week hold on an out of country check that they would have to send for collection. If money is drawn on a US bank then 2 day hold. The company buying the property is located in Australia.
7. Not at our bank but at the bank his lawyer set up as a third party negotiator.
8. The first buyer has not been able to get all their lawyers and parties involved together to sign the papers. His lawyer told them they were moving on to the second set of buyers waiting to purchase the property. To guarantee that their interest and intent was legitimate they ask that they deposit $10m into an account as a deposit to ensure they were buying the property and it was a guaranteed sell. Mutual agreed upon conditions if they missed the Tuesday July 2nd signing date then the first party would lose all rights to purchase along with the non-refundable deposit. Pretty much clearly stated. Most places require a non-refundable deposit when buying homes or property, at least around here. Last time I bought a car I had to put down a thousand dollar non refundable deposit until I could get a cashiers check to pay for the car.
9. He is figuring they will each end up with about $500m after exchange rates and any taxes are paid. He is a local fellow from the country. He has said repeatedly that the small town banks have always took care of him and his businesses and he wanted to continue to deal with them. Only most of the local banks are extremely small community banks. We do have 3 large national banks within 15 minutes of him. It is just a trait of the local people. Invest in those that have invested in you. Also the smaller banks are offering 3.5% interest rates whereas the local big banks are only offering up to 3% or less.

I know what you are thinking and that was my first thought too. But it is true. No made up tale here. I will keep you informed what is happening next week. In fact he asked me to take time and go to Chase, as someone suggested here and meet with their investment people. I told him not a problem.

Comply 101. He is telling the truth. I have seen property with mineral rights, gas, oil and coal go for hundreds of millions of dollars around here. The property he has, #1 has never been timbered, #2 never been mined of coal and other raw materials and #3 has never had a gas well drilled on it. So yes it is hard to believe when you have never been around stuff like this, but I have seen it and heard of it many, many times in years past.

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#2216564 - 06/26/19 07:57 PM Re: Large Deposit Anonymous
osucpa Offline
Diamond Poster
Joined: May 2011
Posts: 1,400
From the replies you have seen most of us are skeptical. We have had customers come to the bank stating they had just received a large inheritance or some other scam. Sometimes our customers believe the story and we must talk them off the ledge. For the customer's sake I hope the story is true and they do collect $1 billion dollars. So one party has placed money in an escrow account pending the closing of the transaction. I look forward to hearing updates.

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#2216571 - 06/26/19 08:46 PM Re: Large Deposit Anonymous
ItNeverEnds CRCM Offline
Platinum Poster
Joined: Oct 2006
Posts: 992
Looking for my sanity
As others have mentioned, CDARs is your best route. He deals with you and they place all the CDs at other banks all under the $250,000 FDIC insurance limits. You can sell one way so that none of it is on your balance sheet or you can have some reciprocal so that you get some funds back through CDARs (you get CDs from other banks looking to place funds). It would be a lot of accounts to manage for him, but it's one way for him to deal with a local bank, but have his deposits placed elsewhere.
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- George Carlin

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#2216576 - 06/26/19 09:06 PM Re: Large Deposit Anonymous
Anonymous
Unregistered

This sounds too delicious to be true. Can't wait until next Tuesday when the genie shows up with a billion dollars in unmarked bills.

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#2216587 - 06/27/19 12:23 AM Re: Large Deposit Anonymous
rlcarey Offline
10K Club
rlcarey
Joined: Jul 2001
Posts: 79,280
Galveston, TX
CDARS smedars there are not enough banks in that system to place billion dollars. This is a joke. Hence the anonymous post. Come on people???
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#2216622 - 06/27/19 04:04 PM Re: Large Deposit Anonymous
madukes Offline
Diamond Poster
madukes
Joined: Jul 2009
Posts: 1,448
Flyers Country
Curious as to why the town is sending him tax bills? Shouldn't he be billing them for rent?

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#2216632 - 06/27/19 04:44 PM Re: Large Deposit Anonymous
Anonymous
Unregistered

PROSPECTIVE customer doesn't think to contact his own financial institution?

I would do ZERO leg work for this guy.

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#2216747 - 06/28/19 07:51 PM Re: Large Deposit rlcarey
ItNeverEnds CRCM Offline
Platinum Poster
Joined: Oct 2006
Posts: 992
Looking for my sanity
Originally Posted By rlcarey
CDARS smedars there are not enough banks in that system to place billion dollars. This is a joke. Hence the anonymous post. Come on people???


I wasn't implying that I believed it, but the poster seemed like they did, so just offering my 2 cents. No offense to the anon poster, but it sounds like the perfect story line for a sit-com.
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- George Carlin

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#2216772 - 07/01/19 12:49 PM Re: Large Deposit Anonymous
HappyGilmore Offline
10K Club
Joined: Jun 2004
Posts: 19,483
Pulling people out of the ditc...
i'll be grilling up some hotdogs and popping popcorn tomorrow as I await the big reveal that, in fact, the prospective customer was either a bit of a loon and no windfall was received, or this was 100% legit and the windfall was received. Please feel free to come join me at the wait party.
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#2216794 - 07/01/19 04:06 PM Re: Large Deposit Anonymous
P*Q Offline

Power Poster
P*Q
Joined: May 2001
Posts: 8,458
Somewhere
I just joined to witness the spectacle. smile

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