Choose a strong bank to do business with. It is a good idea to monitor the bank watch lists to ensure your bank is not on the list, for example. For deposits that will be on deposit for an extended period of time, you will want to split the funds over two or more banks to get coverage for the amount in its entirety. It is likely that the client would be entitled to the interest in this situation, under the provisions of Iowa Court Rule 45.4(3)(accounts generating positive net earnings). If a deposit is not going to be on deposit long enough to make splitting it up over several banks practical, just get the money in and out as soon as possible. Speed is your friend, in this situation. Electronic or wire deposits and transmittals are best for this purpose. If you routinely have deposits in excess of the insurance limit, you might consult with your banker regarding commercial deposit insurance. This is an expense that could be passed along to the clients, so long as you disclose it to your clients and address it in your fee or engagement agreement. Lastly, some clients will have their own deposits at the same bank where your trust account is located. It is imperative that you discuss the insurance issue with them to ascertain if their personal deposits will affect coverage for what you maintain for them in the trust account.
