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SOFI Stock Pops on Increased FDIC Insurance News

  • SoFi Technologies’ (SOFI) checking and savings accounts will now have access to up to $2 million in FDIC insurance.
  • Also, the company is establishing a network of partner banks in order to allow SoFi to offer this additional insurance.
  • SOFI stock rallied 5% on the news.
SOFI stock - SOFI Stock Pops on Increased FDIC Insurance News

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There’s positive news for some of SoFi Technologies’ (NASDAQ:SOFI) customers today. Members with checking and savings accounts will have access to up to $2 million of Federal Deposit Insurance Corporation (FDIC) insurance. This sounds like a win-win scenario for the company and its clients, so traders are pushing SOFI stock higher today.

Previously, SoFi Technologies’ checking and savings account members had access to $250,000 of FDIC insurance per account. This was considered the industry standard. Yet, recent banking sector events caused some depositors to wonder whether their funds above $250,000 are safe.

Clearly, SoFi Technologies wanted to react promptly to this concern. The company established SoFi FDIC Insurance Network, a “newly created partnership with multiple banks.” Creating a network of banks enables SoFi Technologies to “functionally allow members the benefits of multiple accounts,” including enhanced insurance.

What’s Happening With SOFI Stock?

Even while the major stock market indices were mixed this morning, SOFI stock jumped 5% soon after the opening bell on Wall Street and as of 10:30 a.m. Eastern, shares were firmly above the $5 level.

Understandably, SoFi Technologies’ shareholders would be in a good mood. For one thing, offering up to $2 million of FDIC insurance for qualifying accounts should attract more customers to SoFi. It can also help SoFi Technologies prevent jittery customers from leaving.

SoFi Technologies deserves credit for finding a creative solution to the standard $250,000-per-account FDIC insurance limit. There are broader implications here, as more banks might copy SoFi’s strategy and form their own partnership networks.

As you might expect, SoFi Technologies CEO Anthony Noto is proud of his company’s strategy to provide enhanced deposit insurance. “By offering access to up to $2 million in FDIC insurance, we are making sure our members have peace of mind about their money at SoFi,” Noto declared.

Whether they’ll actually have “peace of mind” remains to be seen. Still, it’s noteworthy that SoFi Technologies is proactively addressing its clients’ concerns. So, at least for today, SOFI stock is flashing bright green numbers.

On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

David Moadel has provided compelling content – and crossed the occasional line – on behalf of Motley Fool, Crush the Street, Market Realist, TalkMarkets, TipRanks, Benzinga, and (of course) He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets.

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