Is Upgrade FDIC Insured? What You Need to Know

Individuals often prioritize the safety of their funds in financial institutions. Understanding deposit protection is a fundamental aspect of financial literacy. The Federal Deposit Insurance Corporation (FDIC) safeguards depositors.

Understanding Deposit Insurance

The Federal Deposit Insurance Corporation (FDIC) is an independent agency established by the U.S. Congress to maintain stability and public confidence in the nation’s financial system. Its mission is insuring deposits against loss in case of bank failure. This insurance is automatic for all deposit accounts opened at an FDIC-insured institution.

FDIC insurance covers deposit accounts, including checking, savings, money market deposit accounts (MMDAs), and Certificates of Deposit (CDs). Cashier’s checks and money orders issued by a bank are also protected. This coverage extends to the principal amount deposited and any accrued interest, within the insurance limits.

Not all financial products are covered by FDIC insurance. Investments like stocks, bonds, mutual funds, annuities, and life insurance policies are not insured, even if purchased through an FDIC-insured bank. Contents of safe deposit boxes and cryptocurrencies are also not protected. The standard coverage limit is $250,000 per depositor, per FDIC-insured bank, for each account ownership category. Different ownership categories, such as single accounts, joint accounts, and certain retirement accounts, allow for separate insurance coverage at the same institution.

Upgrade’s Deposit Coverage

Upgrade operates as a financial technology company, not a traditional bank. It partners with FDIC-insured banks to offer deposit products, such as checking and savings accounts. This partnership model ensures funds deposited through Upgrade’s platform are protected by federal deposit insurance.

For instance, money deposited into an Upgrade One Checking account is insured through a partner like Cross River Bank. Funds in Upgrade Premier Savings accounts are also insured through Cross River Bank and a network of other participating institutions. This arrangement provides “pass-through” FDIC insurance, meaning funds are insured by the underlying partner bank up to the standard $250,000 limit per depositor, per insured bank, per ownership category. Some Upgrade Premier Savings accounts may offer aggregate FDIC and/or NCUA insurance up to $1 million or more by distributing deposits across multiple partner banks.

Consumers should differentiate between Upgrade’s deposit products and its other financial offerings. Products like personal loans, credit cards, or lines of credit provided by Upgrade are not deposit accounts. These products are not eligible for FDIC insurance, as the insurance specifically covers deposits. This distinction helps consumers understand the protection of their funds with Upgrade.

Verifying Deposit Insurance Status

To confirm the FDIC insurance status of any financial institution, including the partner banks that hold Upgrade deposits, use the FDIC’s official BankFind tool. When using this tool for Upgrade accounts, search for the name of the partner bank, such as Cross River Bank. Do not search for Upgrade directly, as it is a fintech company.

Another way to verify insurance is to look for the official FDIC sign or logo. This logo is displayed on the websites of FDIC-insured banks and often in their physical branches. Checking the financial institution’s website for explicit statements about their FDIC insurance status is a reliable practice.

Consumers should confirm that the specific bank holding their deposits is FDIC-insured. This diligence ensures their funds are protected in the event of a bank failure. Understanding these verification methods helps individuals manage their finances.