FDIC? You don’t need it, and here’s why!


At Zenus, we believe in banking beyond borders. To make this a reality, we use cutting-edge technology and a proprietary application process to offer US bank accounts to people and businesses from all over the world. This is revolutionary, if we do say so ourselves, and with a proposition as compelling as that, it’s normal for some people to think, “Hmm, does this sound too good? How safe is it?”. What happens next is quite often people ask us why we are not a member of the Federal Deposit Insurance Corporation and/or the Financial Services Compensation Scheme. Let’s address this topic here.

Why is Zenus Bank not an FDIC member?

The reason is very simple. Zenus is a full-reserve bank. If this doesn’t mean much to you, allow us to give you some context. Today, most banks operate as fractional-reserve banks, which is the dominant model of banking in the world.

Fractional-reserve banking simply means that banks who take depositors’ money can then lend it out to people and businesses while keeping only a small fraction (there’s that word) inside the actual bank, available for customers to withdraw. This carries an inherent risk since, as we have seen at the start of 2023, too many people withdrawing their money at the same time can bring down a fractional-reserve bank. Names such as Silicon Valley Bank, Signature Bank or Credit Suisse will surely be on many people’s minds.

Full-reserve banks such as Zenus, on the other hand, are legally unable to lend out their customers’ funds. In other words, 100% of the deposits (your money) are always inside the bank. This means we have a much, much lower risk profile than your average bank, and these risks relate to common threats such as cyber hacking and so on. But the existential risk, that of you losing your money due to the bank engaging in reckless lending behavior – that simply does not exist with Zenus. We don't invest your deposit or make loans; we just charge a fee for our services.

The benefits of Zenus’ full-reserve banking model

It should be clear by now that holding your funds with Zenus is extremely safe, in fact much safer than with other financial institutions. But just to put your mind completely at ease, here are some extra reasons why Zenus – while not a member of the FDIC or FSCS – is arguably one of the most secure places where you can hold your money.

  • Strong Regulatory Oversight

Zenus is an American bank and as such it is overseen by the Office of the Commissioner of Financial Institutions of Puerto Rico (OCIF). Relevant US regulatory bodies such as FinCEN, OFAC, CFPB, and IRS delegate oversight responsibilities to OCIF, who provides oversight and monitoring to protect customer interests and maintain the stability of the American banking system.

  • Advanced Security Measures

Zenus Bank’s foundation rests on technological innovation, which enabled us to extend access to the American banking system worldwide. We achieved this by implementing leading-edge security protocols such as remote ID verification, encryption, and robust fraud detection systems. These measures safeguard customer data and financial transactions against unauthorized access, guaranteeing the utmost level of security.

  • Transparency

As a full-reserve bank, Zenus offers you 24/7 access to your money. We also clearly state our fees, and we provide instant notifications about your account so you can always be on top of your finances.

Finally, before deciding that FDIC or FSCS membership is the definitive financial security standard, consider that false FDIC membership claims happen regularly. Many money institutions claim to be associated with these federal institutions. However, the truth is they may simply seek to prey on consumers’ lack of knowledge. Remember – always do your due diligence! Just because you see a logo on a business’ website is no guarantee of trustworthiness.

You’re better off without the FDIC

In conclusion, while FDIC and FSCS memberships serve as a crucial safety net for depositors in traditional banks, it simply isn’t relevant for our clients. Just think about it this way – would you buy drought insurance if you lived at the South Pole? Probably not, as that would prove a needless hassle and cost. Similarly, Zenus Bank wouldn’t gain anything by contributing to the FDIC insurance fund, other than having to pass an extra cost onto you, our customer.

Zenus’ full-reserve banking model, backed by robust risk management technologies and strict regulatory oversight, offers an even higher level of security all the while giving you full access to your funds. We hope this has eased all your safety concerns, and we look forward to welcoming you into the Zenus family.