Personal Investment & Financial Planning Q`s/Windfall Funds



Thank you for your service.  If I were to receive a financial windfall, by any means, and I had a check in my hand, aside from getting a financial advisor, which I would do for sure, should I deposit that check in a bank account for temporary "storage?"

I understand that bank's funds are only protected up to $250,000 by the FDIC, so I was wondering where you would place this windfall check where it would be safe until you had time to figure things out?

For example, if you had a check for $5M, would you place the funds in 20 different banks ($5M divided by $250,000) to protect it while you go about the task of assembling a team to help you manage it?  Seems like a lot of bank accounts to open at different banks.  What would be the safest first step to take?

Hi. In regards to your question, the answer depends on what you are most "worried" about. FDIC insurance covers amounts up to $250k per person (or $500,000 for an account jointly held). This insurance covers the value of the account should a bank go under and not have the assets to give you your money back. Given today's strict rules regarding the assets banks are required to keep on hand to secure their deposits, the liklihood of a banking meltdown in which your money would be at risk in the short term is slim (but not impossible). Therefore, if I were keeping money in a bank for short time until I figured things out, I personally wouldnt be overly concerned about the risk with this as long as I knew the bank was financially sound. With that being said, if you would have worries, you could spread the money over several different institutions. This may not be practical so another thought could be to put the money at a large investment firm such as Vanguard or Charles Schwab (for example) and hold the money in a money market account. Although this type of account does not offer FDIC protection, your dollars are invested in a wide variety of short term/high quality instruments so you eliminate the specific banking/company risk association with having your money in one institution. I hope this helps. Please let me know if you have other questions.

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John D Smith, CFP


I can answer detailed questions regarding mutual fund investing, retirement planning, education planning and related comprehensive wealth management and investment concerns.


I have been providing fee only investment management and comprehensive wealth management services for the past 19 years.

I have a degree in Financial Planning & Counseling and I am also a Certified Financial Planner practitioner.

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