Jane Dotson
Money market accounts are a great way to save money faster than a basic savings account. The funds in your money market account are insured up to $250,000 by the FDIC (Federal Deposit Insurance Corporation) at a bank or the NCUA (National Credit Union Administration) at a credit union. Desert Financial, headquartered in Phoenix, Arizona, is the largest credit union in the state. It offers a Jumbo Money Market account, which is a low-risk, high-yield savings option. This account is federally insured by the FDIC or NCUA at participating financial institutions.
| Characteristics | Values |
|---|---|
| Deposits insured | Yes |
| Insurance provider | NCUA |
| Insurance limit | $250,000 |
| Insurance for deposits swept to other institutions | FDIC or NCUA |
| Account type | Jumbo Money Market |
| Minimum balance | $100,000 |
| Low-balance fee | No |
| Dividends | Only for balances of $100,000 or more |
| Account opening methods | In person, by phone, online, or through the mobile banking app |
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What You'll Learn
Jumbo Money Market Accounts
The Jumbo Money Market account offered by Desert Financial Credit Union is designed for customers with a minimum balance of $100,000. It offers a higher rate than the tiered money market product and allows customers to remain in control of their money while enjoying a great rate. The account is administered through the Demand Deposit Marketplace (DDM) Program, operated by Stable Custody Group II, LLC.
Deposited funds up to the Maximum Program Deposit Amount may be swept into deposit accounts federally insured by the FDIC or NCUA at participating Receiving Financial Institutions. These include City National Bank, an RBC Company; Citizens Bank, National Association; Peapack-Gladstone Bank; First Business Bank; Morgan Stanley Bank; Metropolitan Commercial Bank; Renasant Bank; Morgan Stanley Private Bank; Bell Bank and Sallie Mae Bank. While funds are on deposit at Desert Financial, customers benefit from share insurance through the NCUA. Once funds are swept to another insured institution, deposits are insured by the FDIC (for banks) or NCUA (for credit unions).
If the total balance in a customer's Jumbo Money Market account falls below $100,000, they will not be charged a low-balance fee. However, they will not earn any dividends until their balance reaches at least $100,000 again. Customers can view their full balance in Online Banking, on the mobile app, and on their statements. They will continue to receive their tax forms from Desert Financial and can contact the institution with any questions about their account.
Desert Financial Credit Union is headquartered in Phoenix, Arizona, and is the largest credit union in the state. It has over 476,000 members across 50 locations and offers money market rates that are 8X the national average. Membership is open to those who live, work, worship, attend school, or volunteer in all Arizona counties except Apache, Graham, Greenlee, and Santa Cruz. Immediate family members of current Desert Financial Credit Union members are also eligible to join.
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FDIC Insurance
The Federal Deposit Insurance Corporation (FDIC) provides deposit insurance to protect your money in the event of a bank failure. FDIC deposit insurance covers money held in traditional deposit accounts at FDIC-insured banks, up to a maximum of $250,000 per owner. This includes accounts such as money market accounts, savings accounts, and certificates of deposit (CDs). Coverage is automatic when you open one of these accounts at an FDIC-insured bank.
The FDIC deposit insurance coverage limit of $250,000 per owner applies to all deposit accounts held at the same bank, including payable on death (POD) and in trust for (ITF) accounts. As of April 1, 2024, the maximum insurance coverage for a trust owner with five or more beneficiaries is $1,250,000 per owner for all trust accounts held at the same bank.
You can use the FDIC's Electronic Deposit Insurance Estimator (EDIE) to calculate the insurance coverage of your deposit accounts. EDIE provides information on how the insurance rules and limits apply to your specific group of deposit accounts and what portion, if any, exceeds the coverage limit.
It is important to note that the FDIC only insures your money if it is in a deposit account at an FDIC-insured bank. Banks may offer financial products and services that are not deposits, and these are not insured by the FDIC.
In the case of Desert Financial, the Jumbo Money Market account is administered through the Demand Deposit Marketplace (DDM) Program. Deposited funds up to the Maximum Program Deposit Amount may be swept into deposit accounts federally insured by the FDIC or the National Credit Union Administration (NCUA) at participating Receiving Financial Institutions. While your funds are on deposit at Desert Financial, you benefit from share insurance through the NCUA. Once funds are swept to another insured institution, your deposits will be insured by the FDIC (for banks) or NCUA (for credit unions).
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NCUA Insurance
The National Credit Union Administration (NCUA) provides insurance for members of federally insured credit unions. This insurance is provided automatically when a member joins a federally insured credit union, and there is no need to apply for it separately. The Share Insurance Fund, administered by the NCUA, insures individual accounts at federally insured credit unions up to $250,000, and a member's interest in all joint accounts combined is insured up to the same amount. The fund also separately protects IRA and KEOGH retirement accounts up to $250,000. This insurance is backed by the full faith and credit of the United States, and no one has ever lost money from insured deposits at a federally insured credit union.
The NCUA provides an electronic insurance calculation program called the Share Insurance Estimator, which allows consumers, credit unions, and their members to understand how its share insurance rules apply to member share accounts. This tool can be used to calculate the insurance coverage of all types of share accounts offered by a federally insured credit union, including share draft accounts (checking accounts), share savings accounts, and various types of personal, business, and government accounts.
It is important to note that the NCUA does not insure all types of assets. For example, it does not insure money invested in stocks, bonds, mutual funds, life insurance policies, annuities, or municipal securities, even if these products are sold at a federally insured credit union. Additionally, the NCUA does not insure safe deposit boxes or their contents, and it does not insure digital assets or cryptocurrencies.
In the case of Desert Financial, a credit union, the Jumbo Money Market account is offered through the Demand Deposit Marketplace (DDM) Program. As part of this program, deposited funds may be swept into deposit accounts federally insured by either the FDIC or NCUA at participating Receiving Financial Institutions. While funds are on deposit at Desert Financial, they are insured by the NCUA. Once funds are swept to another insured institution, the type of insurance (FDIC or NCUA) will depend on whether the institution is a bank or a credit union.
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Demand Deposit Marketplace (DDM)
The Demand Deposit Marketplace (DDM) is a program that allows banks, trust companies, and credit unions to provide their customers with expanded deposit insurance coverage on their funds. It is a flexible tool that offers wholesale funding and a 'reciprocal deposits' feature, allowing institutions to adjust their balance sheets as needed. Under the DDM program, cash balances from customers' accounts are swept into the program and allocated into deposit accounts at participating receiving institutions in increments of up to $250,000 per customer. This allows customers to access expanded deposit insurance on their funds while maintaining daily access to their money.
The DDM program is particularly beneficial for smaller, regional banks as it provides a tool to compete with large mega-banks. With startups seeking greater security for their deposits, many are opting for larger banks that seem "too big to fail". The DDM program offers a solution by providing expanded FDIC insurance coverage.
The DDM program is administered by Stable Custody Group II, LLC, and is operated by Reich & Tang Deposit Solutions. It is important to note that while funds in the DDM program are insured, any funds placed into the program above the limit are considered excess and are not eligible for deposit insurance coverage.
In the context of Desert Schools Federal Credit Union, the Jumbo Money Market account is offered through the DDM program. This means that deposited funds up to the maximum amount may be swept into federally insured deposit accounts at participating financial institutions. While funds are on deposit at Desert Financial, they are insured through the NCUA. Once funds are swept to another institution, deposits are insured by the FDIC for banks or the NCUA for credit unions.
Overall, the DDM program provides a valuable service for financial institutions and their customers by offering expanded deposit insurance coverage and maintaining daily access to funds.
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Dividends
Desert Financial's Jumbo Money Market account offers a competitive rate for balances of at least $100,000, allowing easy access to your money. This low-risk, high-yield savings option offers a higher rate than their tiered money market product. To earn dividends, you must maintain a minimum daily balance of $2,000 and meet Desert Financial's membership eligibility and credit qualification requirements. If your total balance falls below $100,000, you won't be charged a low-balance fee, but you won't earn any dividends until your balance is back to at least $100,000.
Silver State Schools Credit Union's Money Market account offers higher dividends on balances, with a $2,500 minimum deposit to open. With three interest tiers, your dividends will increase as your balance grows. Their Money Market Plus account earns the highest dividends on balances of $100,000 or more, with a $100,000 minimum deposit to open. Silver State Schools Credit Union's Certificate Accounts also offer competitive dividends, providing a low-risk investment option.
Desert Financial also offers a Health Savings Account (HSA) that allows you to save for health-related expenses while earning dividends. Additionally, their Relationship Rewards program lets you earn points for various banking activities, providing opportunities for higher-level benefits.
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Frequently asked questions
Yes, your money is federally insured. While your funds are on deposit at Desert Financial, you benefit from share insurance through the NCUA. Once funds are swept to another insured institution, your deposits will be insured by the FDIC (for banks) or NCUA (for credit unions).
The funds in your money market account, including interest earned, are insured up to $250,000.
Your money is swept to a participating insured financial institution as part of the program. You will continue to see your balances at Desert Financial within online banking and on your statements.
Money market accounts carry fewer risks than investing in mutual funds, such as stocks and bonds. Your funds are insured, and you will not be charged a low-balance fee. However, you won't earn any dividends if your balance falls below the minimum.
You can open an account in person, by phone, or online. You will need to deposit at least $5,000 to open your account.
