bank rates

Get $50 mln FDIC Insurance w/ CDARS

If you are lucky enough to have over $100k, then the CDARS (certificate of deposit account registry service) is a fast and simple way of getting up to $50 million insured on a single CD account.

How CDARS Works
First, you have use the CDARS website to see if there are any participating banks in your area.

CDARS takes your deposit and splits it up across several participating banks so that you never exceed $100k in one bank. They do this all on the backend and it is totally seamless to the consumer. You get only a single bank statement and all your funds are available through one bank.

Drawbacks of CDARS
There are two drawbacks of CDARS that you should consider.

  1. It appears that only smaller banks participate in the CDARS network. Large national banks like WaMu and Bank of America are not members.
  2. Because CDARS charges participating banks transaction fees, the CD rates for CDARS accounts may be lower than their corresponding regular CD accounts.

Nevertheless, if you have a lot of cash that needs to be insured quickly and easily, CDARS may be a good option for you.

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Comments (4)
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4 Existing Comments
  1. Dan Tanner said:
    on August 14th at 09:49 pm

    Not many banks are with CDARS. That’s the problem. You have divide your pie with different legal persons to insure yourself. That’s available at FDIC website. WMU gave me FDIC booklet very informative. Walk into their branch and ask for it.

  2. Roxanne said:
    on August 14th at 09:52 pm

    I really like the CDARS program, I advise it to all my customers that are conserned about FDIC coverage.

  3. Jonathan B. Smith said:
    on October 8th at 02:56 pm

    I was speaking to a banker at a community bank today a community bank and found out how tough the current liquidity crisis is on their operations. Their loan portfolio is incredibly strong, written to rigorous underwriting standards, but their inter-bank funding has virtually dried up.

    My suggestion to them was to shake the trees in the neighborhood for folks who have substantial cash reserves that are sitting in T-Bills and encourage them to move their investments into substantially higher yielding FDIC insured CD’s with a CDARS participating lending institution.

    Wouldn’t it be interesting if we could get the extremely well connected Promontory Interfinancial Network, LLC Founders to encourage the Feds to encourage investors to place deposit money with community banks, substantially increase the investors’ yields without incurring any additional risks vs. treasuries, and break the liquidity crisis.

    The CDARS vehicle could be a intermediate vehicle that the Fed could use instead of becoming the “lender of last resort” (acting as the counterparty on each inter-bank transaction). In my opinion, it is the community banks that are going to help rectify our economy, not the Wall Street firms or money center banks.

    Presidential Implications

    It could be an arrow in the quiver of whichever Presidential Candidate they support.

    Patriotic Duty

    I think it is our patriotic duty to try and save our economy. I am trying to do my part.

  4. Randy said:
    on April 27th at 12:07 pm

    Does anyone know a website that gives the best CDARS rates similar to sites that do this for CD’s? Also, can anyone who has researched CDARS recommend a bank with the highest rates?