As set forth under the Custodial Agreement and Disclosure Agreement between yourself and Bell State Bank & Trust as Custodian of your HSA (“Agreement”), you may make contributions to your HSA. Based on the value of your HSA and certain threshold and trigger amounts defined under the Agreement, funds may be moved between your Cash Account and Investment Account. These accounts may be either a deposit account at Custodian or an Investment Account at an outside investment company.
Funds that are in a deposit account at Custodian will be insured by the FDIC to the extent of the deposit insurance limits. In the event of the failure of Custodian, you will be a secured creditor of Custodian to the extent of the FDIC deposit insurance limits. If these funds are in excess of the FDIC deposit insurance limits, you will be an unsecured creditor with respect to the excess.
Investment funds that are held at an outside investment company are not considered a deposit account of Custodian and are not FDIC insured. In the event of the failure of Custodian, these funds will remain your separate funds at the outside investment company and are subject to the provisions of the outside investment company.
The FDIC requires all financial institutions that have sweep accounts to notify Account holders of the legal effect of their accounts should the financial institution fail and be taken over by the FDIC.