Frequently Asked Questions
How can deposits greater than the standard FDIC insurance maximum be insured by the FDIC?
The FDIC insures up to $250,000 of a customer’s deposit accounts in a given insurable capacity at an FDIC-insured depository institution. Banks that offer IntraFi® Network DepositsSM, formerly named CDARS®, are members of IntraFi’s network of financial institutions. When your funds are placed through IntraFi Network Deposits, they are divided into amounts under the standard FDIC maximum and placed with other network members—each an FDIC-insured institution. This makes your deposit eligible for FDIC insurance at each member bank. By working directly with one network member, you can access insurance through each FDIC-insured institution.
Who has custody of my funds?
Funds placed through IntraFi Network Deposits are deposited only in FDIC-insured institutions. Your bank acts as custodian for your deposits placed using IntraFi Network Deposits, and the subcustodian for the deposits is The the Bank of New York Mellon (BNY Mellon), the largest custodian in the world with $41.1 trillion in assets under custody and/or administration and $2.2 trillion in assets under management.1
Unique to IntraFi Network Deposits CD offering, you as a depositor can obtain a confirmation of records maintained by BNY Mellon as subcustodian in order to reconcile those records with the statements received from your financial institution. At any time, as often as desired, you as a depositor can obtain a certified statement from BNY Mellon that confirms the exact amount of your CDs, including principal balance and accrued interest, for each FDIC-insured institution that issues a CD through IntraFi Network Deposits. You can submit a request for the certified statement, along with BNY Mellon's processing fee, through your financial institution. BNY Mellon will send the certified statement directly to you or to another party designated by you, such as an auditor.
Who provides the additional FDIC insurance when I place deposits using IntraFi Network Deposits?
Through IntraFi Network Deposits, funds are placed in deposit accounts at members of IntraFi’s network of financial institutions, and those network members provide you with access to the additional FDIC insurance coverage. Working directly with just one bank, you can access coverage through many FDIC-insured institutions.
How can my funds be used locally if my CDs are from financial institutions all over the country?
When institutions that use IntraFi Network Deposits swap deposits on a dollar-for-dollar basis, the same amount of funds placed through the network returns to your financial institution. As a result, the total amount of your original deposit can remain with your financial institution and be used for local lending. (This applies only when placing funds on a reciprocal basis.)
Is my account information safe?
Your account information is protected; your relationship remains between you and your financial institution.
What happens to my deposit if a member bank fails?
When a network member has failed, the bank's deposits placed using IntraFi Network Deposits in most cases have been transferred to a healthy institution—the FDIC's preferred method for handling bank failures. In cases where the FDIC has been unable to find a healthy institution willing to accept such a transfer, it has arranged for the payment of the insured principal and accrued interest to the depositors. This payment has usually occurred in a matter of days.
Please go to http://www.fdic.gov/deposit/index.html to learn more about FDIC insurance.
Is IntraFi Network Deposits safe to use? Has it been thoroughly tested?
IntraFi Network Deposits has been thoroughly tested (with many billions of dollars) and has been designed so as to comply with every relevant FDIC requirement. Since its inception, thousands of depositors have successfully submitted funds for placement through IntraFi Network Deposits.
Use of IntraFi Network Deposits makes it possible for depositors to gain access to multiple millions of dollars of FDIC insurance on funds that are placed in CDs. And, no depositor has ever lost a penny of FDIC-insured deposits.
The service is offered by IntraFi Network (formerly Promontory Interfinancial Network), a trusted fintech provider chosen by more than 3,000 banks across the nation and has received an exclusive endorsement from the American Bankers Association.
Has the FDIC weighed in on the usage of such programs?
Since the creation of the FDIC more than eight decades ago, depositors have always had the option of depositing funds at multiple FDIC-insured banks to gain access to deposit insurance coverage in excess of the standard single-bank insurance amount, which is now $250,000. The FDIC has always known of this practice and at times has even encouraged it. Deposit placement services, such as IntraFi Network Deposits, help depositors to achieve the same familiar result more easily and with added benefits, such as providing banks the opportunity to promote local lending through reciprocal deposits that the depositor’s bank receives in return for deposits placed at other banks.
The FDIC routinely acknowledges that deposit placement services can be used to provide access to expanded deposit insurance coverage. For example, in a 2016 “Frequently Asked Questions” document, the FDIC specifically described how a participating bank can place funds at other participating banks through a bank network to give its customer full insurance coverage on a deposit in excess of $250,000. Moreover, in 2018, the Economic Growth, Regulatory Relief, and Consumer Protection Act was signed into law. Section 202 of the Act defines reciprocal deposits and, subject to statutory limitations, provides that certain reciprocal deposits are deemed not to have been obtained by or through a deposit broker. The FDIC subsequently issued regulations implementing the Act’s requirements.
Some banks receiving deposits placed through an IntraFi Network product have failed during IntraFi Network’s history, ;and every resulting claim for deposit insurance has been paid in full by the FDIC. IntraFi Network Deposits has been thoroughly tested, and reciprocal deposit placement services are recognized both in the FDIC regulations and in state statutes and regulations throughout the United States.
Where can I find an institution that offers IntraFi Network Deposits?
Check with your financial institution to see if it offers IntraFi Network Deposits, or visit the Find a Bank page to find a local institution that does.
1 As reported by BNY Mellon on December 2020. Please see www.bnymellon.com/us/en/who-we-are/index.jsp for details.
2 When deposited funds are exchanged on a dollar-for-dollar basis with other banks that use IntraFi Network Deposits, a bank can use the full amount of a deposit placed through IntraFi Network Deposits for local lending, satisfying some depositors’ local investment goals or mandates. Alternatively, with a depositor’s’ consent, and if authorized under state law, a bank may choose to receive fee income instead of deposits from the banks. Under these circumstances, deposited funds would not be available for local lending.