How CDARS® Works
Everything is handled through a CDARS® Network member of your choice. Financial institutions that can offer CDARS are members of a unique network. When you place a large deposit with a CDARS Network member, that institution uses the CDARS service to place your funds into CDs issued by other members of the CDARS Network. This occurs in increments below the standard FDIC insurance maximum so that both principal and interest are eligible for FDIC insurance. By working directly with just one institution, you can receive insurance coverage from many. And, you receive just one regular consolidated account statement.
When you’re ready to take advantage of CDARS, here’s what happens:
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You sign a CDARS Deposit Placement Agreement and invest money with a member of the CDARS Network (a relationship institution).
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Your funds are placed using the CDARS service.
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Your CDs are issued by other members in the CDARS Network.
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You receive confirmation of your CDs from your relationship institution.
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You receive consolidated interest payments and statements through your relationship institution.
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For more information, watch the video How CDARS Works.
For general information, please check our FAQ page.
Limits apply. The standard FDIC insurance coverage amount is $250,000 per insured capacity per bank through December 31, 2013. Thereafter, the standard FDIC coverage amount will revert to $100,000 unless Congress further extends the higher coverage amount. Accordingly, for CDs that mature on or before December 31, 2013, customer funds will be allocated to banks that are members of the Promontory Network in amounts up to $250,000, and for CDs that mature after December 31, 2013, customer funds will be allocated in amounts up to $100,000.
The CDARS service has been designed to satisfy the FDIC’s requirements for pass-through deposit insurance coverage.
If you are subject to restrictions with respect to the placement of funds in depository institutions, it is your responsibility to determine whether the placement of your funds through CDARS satisfies those restrictions.
When funds are exchanged on a dollar-for-dollar basis with other banks in the Network, a CDARS Network member can use the full amount of a deposit placed through CDARS for local lending, satisfying some depositors’ local investment goals/mandates. Alternatively, with your consent, the member institution may choose to receive fee income instead of deposits from other Network members. Under these circumstances, deposited funds would not be available for local lending.
Funds may be submitted for placement only after entering into a CDARS Deposit Placement Agreement with a CDARS Network member. This agreement contains important information and conditions regarding the placement of funds.
CDARS is a registered service mark of Promontory Interfinancial Network, LLC.