Wednesday, October 21, 2026

Question: If a fintech app holds your money at a partner bank, what does FDIC insurance cover?

Answer: Only the failure of the partner bank, not the app company. If the app, or a company working behind it, goes under or loses track of who owns what, FDIC insurance won’t make customers whole. That happened in 2024 when Synapse, a company that connected apps to banks, went bankrupt. Thousands of customers lost access to their savings, and up to $96 million went missing.