Payroll Deposits and FDIC Insurance

This is a little off-topic, but important.  Many businesses pay their employees on Fridays.  The FDIC likes to close banks on Fridays. 

Payroll deposits are treated just like any other deposit for purposes of determining whether the deposits are insured by the FDIC.  So for instance if you have a $40,000 operating account at your bank, a $50,000 capital expenditures account, and a payroll account of $30,000, you have $20,000 at risk.

If you fund your payroll account on a periodic basis from other sources timed to meet the Friday payroll, you might be making a deposit at the same time the FDIC is about to close the bank.

The solution might be to start paying your employees on Wednesdays.

"One must be so careful these days."  (T.S. Eliot, The Wasteland)

-Marc Ward