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Wise Account balances are not covered by FDIC insurance by default; Wise holds customer funds as permissible investments under money transmitter law and retains any interest earned on those investments. FDIC insurance coverage for USD balances is available only to users who affirmatively opt into the interest feature, which sweeps funds into partner bank accounts.
This analysis describes what Wise's agreement states, permits, or reserves. It does not constitute a legal determination about enforceability. Regulatory applicability and practical outcomes may vary by jurisdiction, enforcement context, and individual circumstances. Read our methodology
This provision establishes that the default condition for Wise Account balances is non-FDIC-insured fund holding, with Wise retaining earnings on the permissible investments used to hold customer funds. Users who do not opt into the interest feature do not receive deposit insurance protection, which is a material distinction from traditional bank account structures.
Under this clause, funds held in a Wise Account are not automatically protected by FDIC insurance; the agreement states that Wise owns any interest earned on investments backing customer balances. Consumers who opt into the interest feature will have their USD balances swept into FDIC-insured partner bank accounts, providing deposit insurance coverage up to applicable FDIC limits.
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"Wise is Not a Bank, and your Wise Account is Not a Bank Account. Money you hold with Wise, in any currency, is not automatically insured by any deposit protection scheme, including the Federal Deposit Insurance Corporation (FDIC). Wise holds funds held by its customers in permissible investments in accordance with applicable laws. Wise owns the interest or other earnings on these investments, if any. However, although Wise is not a Bank, eligible customers that opt-in to the "interest feature" will have their United States Dollar (USD) funds held in their Wise account "swept" into a FDIC insured, interest bearing account at one or more of our participating banks.Excerpt from Wise's Terms of Use (Superseded URL)
1. REGULATORY LANDSCAPE: This provision engages FDIC deposit insurance regulations, CFPB oversight of prepaid accounts and money transmitter fund-holding practices, and state money transmitter licensing requirements governing permissible investments. The statement that Wise owns interest earned on permissible investments holding customer funds is a standard feature of money transmitter operations but should be evaluated against any applicable state law requirements regarding disclosure of earnings on customer funds. 2. GOVERNANCE EXPOSURE: High. The non-FDIC-insured default status of Wise Account balances creates a material disclosure obligation. Failure to ensure consumers understand this distinction at account opening and at the point of fund deposit could attract CFPB scrutiny under unfair, deceptive, or abusive acts or practices standards. The interest sweep structure for opt-in customers introduces additional compliance obligations regarding bank partner due diligence and pass-through FDIC insurance eligibility requirements. 3. JURISDICTION FLAGS: All US states are relevant given the money transmitter licensing structure. States with enhanced consumer disclosure requirements for non-bank financial institutions may impose additional obligations regarding the non-insured status of funds. The Delaware escheatment default (Section 9.3) for accounts with unknown or foreign addresses creates additional state-specific exposure. 4. CONTRACT AND VENDOR IMPLICATIONS: The interest feature involves fund sweeping to one or more unnamed participating banks; procurement and compliance teams should identify those partner institutions and assess whether pass-through FDIC insurance eligibility conditions are met for the sweep accounts. The agreement reserves the right to change safeguarding institutions without notice, which may affect continuity of FDIC coverage for opt-in customers and warrants monitoring provisions in any institutional arrangements. 5. COMPLIANCE CONSIDERATIONS: Compliance teams should audit the account opening and onboarding disclosures to confirm that the non-FDIC-insured default status is presented with adequate prominence and clarity. The opt-in mechanism for the interest feature should be reviewed to confirm it meets affirmative consent standards. Periodic review of participating bank partner arrangements is advisable to ensure ongoing FDIC pass-through eligibility for sweep accounts.
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This provision establishes that the default condition for Wise Account balances is non-FDIC-insured fund holding, with Wise retaining earnings on the permissible investments used to hold customer funds. Users who do not opt into the interest feature do not receive deposit insurance protection, which is a material distinction from traditional bank account structures.
Under this clause, funds held in a Wise Account are not automatically protected by FDIC insurance; the agreement states that Wise owns any interest earned on investments backing customer balances. Consumers who opt into the interest feature will have their USD balances swept into FDIC-insured partner bank accounts, providing deposit insurance coverage up to applicable FDIC limits.
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