The FDIC Board of Directors adopted an interim final rule on August 27 letting qualifying banks accept far more in reciprocal deposits without those balances counting as brokered deposits, a technical change with a practical result: a single relationship bank can now hold much more of a business customer’s cash under full FDIC coverage.
Reciprocal deposit networks spread a customer’s balance across other insured banks in pieces below the $250,000 insurance limit, while the customer keeps one relationship and one statement. The rule implements section 902 of the 21st Century ROAD to Housing Act and replaces the old flat exclusion cap with a tiered, liability based formula: a bank may exclude 50 percent of the liabilities portion up to $1 billion, 40 percent between $1 billion and $10 billion, and 30 percent above that, up to a $30 billion ceiling. The FDIC also broadened who counts as an “agent institution.”
Why it matters for a finance leader: any company keeping millions in operating cash for payroll, supplier payments or tax reserves has had to either accept balances above $250,000 sitting outside FDIC coverage at one bank, or spread cash manually across multiple banking relationships to stay insured. A materially higher reciprocal deposit ceiling means a single relationship bank can now absorb more of that balance while keeping it fully insured, a quiet but real reduction in counterparty risk for treasury teams wary of concentrating cash since the 2023 regional bank failures. The original insight is about timing: regulators are widening a safety valve for exactly the kind of large, uninsured deposits whose flight helped sink Silicon Valley Bank and First Republic, effectively building more insured capacity into the system rather than just telling depositors to diversify. Comments on the interim rule are due within 30 days of Federal Register publication, so the tiers could still move.
Bank regulatory reporting has been under active revision all year, and this rule extends that pattern into deposit insurance rather than transaction monitoring. It also lands as new de novo banks continue entering the market, giving smaller institutions another tool to compete for large corporate deposits.
