SoFi Technologies Inc. said Wednesday that those with its checking or savings accounts will be able to access up to $2 million of Federal Deposit Insurance Corporation insurance, versus the standard $250,000 amount.
“SoFi Checking and Savings is able to offer additional FDIC insurance through the SoFi FDIC Insurance Network, a newly created partnership with multiple banks designed to provide the best benefits to SoFi members,” the company said in a release.
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noted that for those who opt in to the increased coverage, the company will “seamlessly place their deposits beyond the standard insurance coverage with specifically identified FDIC insured partner banks.”
The benefit is currently available to new members and will become available to existing members over the next week.
“We know the last few weeks have been unnerving for many consumers, and we hope this helps,” Chief Executive Anthony Noto said in the release.
SVB MoffettNathanson analyst Eugene Simuni called SoFi’s move “encouraging” and said in a report that it “minimizes the near-term deposit withdrawal risk and reduces the risk of deposit flight to larger banks in the wake of the bank crisis.”
SoFi obtained a bank charter last year, and while SoFi Bank only contributed about 10% of company revenue in the latest quarter, Simuni noted that it’s “an important growth vector for SoFi,” with the potential to grow at a 70% compound annual growth rate through 2026.
Additionally, SoFi Bank “has significant benefits for SoFi’s broader ecosystem” because it gives the lending business access to lower-cost financing,” he wrote in a note to clients.
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Through the insurance arrangement, “there is no reduction in SoFi’s access to deposits to fund loans and no changes to the benefits of SoFi members who opt into the program,” he said.
SoFi shares were up 2.4% in afternoon trading Wednesday.
