Wise discloses that it is not a bank and that customer funds are not FDIC-insured, but are instead safeguarded by being held in segregated bank accounts or US Treasury securities separate from Wise's operating funds.
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 the legal and financial structure under which customer funds are held, which is materially different from a bank deposit relationship. In the event of Wise's insolvency, customer funds held in safeguarded accounts are treated differently than FDIC-insured deposits, and recovery would depend on applicable state money transmission law and the legal status of segregated funds.
The updated terms now authorize Wise to accept incoming funds via FedNow, a new instant payment service. The agreement states that FedNow transactions are processed in real time and generally cannot be canceled or reversed once completed, distinguishing them from traditional transfers that may have reversal windows. The terms also establish that Wise may decline any incoming FedNow transaction at its discretion where required for security, compliance, or operational reasons, without specifying advance notice or appeal procedures. Users receiving FedNow payments should understand that such transfers become final immediately upon completion.
View change record →The agreement discloses that funds held in a Wise account are not covered by FDIC insurance up to $250,000 as they would be in a bank account. Funds are instead safeguarded in segregated accounts or US Treasury securities, which provides structural protection but does not carry the same statutory guarantee as FDIC insurance.
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"Wise is not a bank. Your funds are not held in a bank account and are not insured by the Federal Deposit Insurance Corporation (FDIC). Wise safeguards your funds by holding them in a bank account in Wise's name or in US Treasury securities, separate from Wise's own operating funds.— Excerpt from Wise's Wise Terms of Use
(1) REGULATORY LANDSCAPE: As a licensed money transmitter, Wise is regulated at the state level under money transmission licensing statutes, many of which impose permissible investment requirements and net worth obligations to protect customer funds. The FDIC disclosure requirement engages consumer protection obligations under FTC Act standards for financial product disclosures. FinCEN regulations apply to Wise's operational AML obligations independent of deposit insurance status. (2) GOVERNANCE EXPOSURE: Medium. The non-FDIC-insured status is a material risk disclosure, particularly for users holding significant balances for extended periods. The safeguarding mechanism (segregated accounts and Treasury securities) provides operational protection but is subject to the legal proceedings and asset recovery processes applicable to a non-bank entity in insolvency scenarios. (3) JURISDICTION FLAGS: State money transmission laws vary in their permissible investment requirements and customer fund protection mechanisms. The strength of the safeguarding framework depends on the specific state licensing obligations Wise maintains and whether they impose trust or statutory priority status on customer funds. (4) CONTRACT AND VENDOR IMPLICATIONS: Institutional or business customers holding material balances in Wise accounts should assess this non-FDIC status against their treasury and counterparty risk policies. The safeguarding structure should be evaluated in the context of the customer's own risk management framework and whether segregated fund status would be legally recognized in a Wise insolvency proceeding. (5) COMPLIANCE CONSIDERATIONS: Compliance teams advising business customers on fund custody should confirm that Wise's current safeguarding disclosures are consistent with the representations in this agreement and that the actual custodial arrangements (bank accounts vs. Treasury securities) are current and verifiable.
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This provision establishes the legal and financial structure under which customer funds are held, which is materially different from a bank deposit relationship. In the event of Wise's insolvency, customer funds held in safeguarded accounts are treated differently than FDIC-insured deposits, and recovery would depend on applicable state money transmission law and the legal status of segregated funds.
The agreement discloses that funds held in a Wise account are not covered by FDIC insurance up to $250,000 as they would be in a bank account. Funds are instead safeguarded in segregated accounts or US Treasury securities, which provides structural protection but does not carry the same statutory guarantee as FDIC insurance.
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