Banking - How to keep funds insured

The funds up to $250K is an FDIC thing, so take a look at its website to see how this works -https://www.fdic.gov/ I don't know which bank you're referring to (it seems several of them are having issues), so you may need to wait and see if another bank takes it over, like JP Morgan did with First Republic.

For your legal questions, go to an attorney - most of us aren't attorneys and even if we were, we don't have your documents. Get your attorney on this immediately so he or she can review your management agreement to see how this works. Once this gets resolved, your next step should be advise this company that changes will be made - it's a matter of whether they still want to be your property manager and do it your way or you go to a company that will.

If you haven't already done so, you need to go to your property manager IMMEDIATELY and see what their plans are - and it's ok to tell them you want your money under your control, as it should be. At the very least, your money should be in the association's name and signing authority should be issued to the appropriate board officer. otherwise, you may be in a world of trouble if the management company goes pfft. Here's another article you can start with - https://www.ksnlaw.com/blog/protecting-association-funds/. You might also check out the CAI website to look at their educational materials - some address internal controls HOAs can use to protect the bag.

This is why it helps to get a fidelity bond in the association's name - that could be what the management company is referring to when it said your money would be insured beyond $250K. However, I wouldn't be surprised if the bond is actually in the name of the management company and they dole out the money if disaster strikes.

Some banks and credit unions provide their own insurance on deposits over $250,000, up to a limit of $500,000 the last I heard. Not all of them do, you'll have to shop around.

In addition, some banks offer a program called IntraFi Network Deposits (formerly known as Certificate of Deposit Account Registry Service (CDARS)). It allows for deposits in excess of $250,000 to be FDIC insured by spreading the money around in participating institutions. Since the money is in CDs, the program is appropriate for reserve funds.

If you're on the board, consider asking the manager to explain what the benefits are of using that particular bank. I can see it for the operating accounts, especially if their bank is one of the bigger players in your area. It can be easier for the management company to have all of their clients in a single place. But reserves often end up getting moved for insurance purposes, and you can sometimes find better returns on your money if you shop around - I would resist being forced into any particular institution unless I was given some compelling reason for it.