# Safeguarding
> Safeguarding means client funds are held at licensed institutions, separately from the company's own money. How it differs from deposit insurance.
Canonical: https://fasset.com/business/glossary/safeguarding/

Safeguarding means client funds are held at licensed financial institutions and kept separate from the company's own operating money. If the company fails, safeguarded funds are intended to be returned to clients rather than treated as the firm's assets, subject to the legal process.

- **Where funds sit:** At licensed banks or e-money institutions, not on the company's own balance sheet
- **Segregation:** Kept in accounts separate from company operating funds, reconciled regularly
- **What it is not:** Not a loan to the company and not used to fund its operations
- **If the company fails:** Intended to be returned to clients rather than treated as the firm's assets, subject to the legal process

## Is safeguarding the same as deposit insurance?

No. Deposit insurance, like FDIC or FSCS cover, is a payout scheme: if an insured bank fails, a government-backed fund reimburses depositors up to a set limit. Safeguarding works differently: client funds are kept separate from the company's own money, so they are intended to stay out of reach of its creditors if it fails. It is not deposit insurance: there is no government-backed compensation scheme behind it, and recovery depends on the safeguarded pool. The full comparison is on the blog.

## Related terms

- **Stablecoin:** A digital token designed to track a currency. USDT is designed to track the US dollar and settles in about 20 seconds.
- **Escrow:** Funds held by a neutral third party until both sides confirm the work is done, released by milestone. In development at Fasset.
- **Mid-market rate:** The real exchange rate, no markup, the one on Google. Banks add 2 to 4% on top before they show you a number.

## Open an account

Fasset Business gives businesses local currency accounts and modern rails. The application runs entirely online.

- Open an account
- See the demo

Client funds are held separately from Fasset’s own.