Latest FDIC update: Sunday, March 12th: Depositors will have access to all their SVB stored funds starting Monday, March 13.
Recent FDIC Press release: https://www.fdic.gov/news/press-releases/2023/pr23017.html
Who is impacted by the SVB Shutdown?
Primary: Tech Startups that had funds stored in an SVB account. As of March 13, 2023, the FDIC has taken measures to ensure all money held in SVB accounts will be available to account holders.
Secondary: The SVB failure may impact you if you use some 3rd party apps such as Rippling, Pilot.com, Bill.com, or Payoneer.
An ongoing list of 3rd party apps affected by SVB can be found here: https://bankcollapseapp.info/
I had a cash sweep account with SVB. What happens to that?
The good news is that the money help in cash sweep accounts opened through SVB isn’t on SVB’s balance sheet. The current understanding is that your funds should be 100% recoverable, but guidance hasn’t been made available as to when or how. As of this writing, it is assumed that cash sweep accounts will be accessible per the usual methods on Monday, March 13th.
Where else should I consider opening an account?
Most VCs are urging their investees to open accounts with more traditional and secure banks, such as Bank of America, Chase, Capital 1, Citi, and Wells Fargo. We’ve seen that many of our clients have been able to open Chase accounts quickly.
You’ve moved your money, what should you do now?
You’ll need to connect your new bank account/s to your financial apps, such as your accounting platforms and payroll, and update your details for recurring expenses.
Gusto recently shared details on how to do this: https://gusto.com/company-news/gusto-payroll-processing-is-not-impacted-by-the-silicon-valley-bank-situation
If you don’t know which apps or accounts need your banking details, you can check in with your accountant, and they can help you make updates.
Why do Brex and Mercury claim I’m insured to $1M, but for SVB, it’s only $250k?
Mercury and Brex aren’t banks; they’re fintech companies that act a lot like sweep accounts by transferring your funds into accounts at different banking institutions, which are FDIC insured up to $250k.
Should I be worried about other banks failing?
If the 2008 crisis taught us anything, it’s probably yes. In fact, as of Sunday, March 12th, New York’s Signature Bank, which services crypto companies, failed, and all eyes are now on First Republic Bank. Analysts say a major crisis is contained, but that remains to be seen.
I have a UK SVB account; what happens to my funds?
In the UK, SVB has been purchased by HSBC Bank, and they will begin to process of migrating accounts/funds to HSBC-held accounts: https://www.reuters.com/markets/deals/hsbc-says-it-has-acquired-silicon-valley-bank-uk-2023-03-13/
As more updates become available on this evolving situation, ShayCPA will keep this post updated with the latest developments.