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Diagram that provides an example of how CDARS Works: A customer invests $5,000,000 through a financial institution that is a CDARS Network member. The Network member uses the CDARS service to place funds into CDs issued by other CDARS Network members. This occurs in increments below the standard FDIC insurance maximum of $250,000. In this example, 21 CDs under $250,000 are issued by 21 network banks. The customer receives coverage from many banks by working directly with just one bank.  The diagram shows a happy customer in a business suit beside an image of one bank and a stack of money. Dotted lines show the flow of the deposit from the one bank to Network member banks in increments of less than $250,000 in principal and interest.

View this short video to learn more about CDARS.


How CDARS Works

Everything is handled through a CDARS® Network member of your choice. The thousands of 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 ($250,000) so that both principal and interest are eligible for FDIC insurance. By working directly with just one institution, you can receive 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:

number 1 You sign a CDARS Deposit Placement Agreement and a custodial agreement, and then invest money with a member of the CDARS Network (a relationship institution).
number 2 Your funds are placed using the CDARS service.
number 3 Your CDs are issued by other members in the CDARS Network.
number 4 You receive confirmation of your CDs from your relationship institution.
number 5 You receive consolidated interest payments and statements through your relationship institution.

For general information, please check our FAQs page.


The CDARS service has been designed to satisfy the FDIC’s requirements for pass-through deposit insurance coverage.

If a depositor is subject to restrictions with respect to the placement of funds in depository institutions, it is the depositor's responsibility to determine whether the placement of its funds through CDARS satisfies those restrictions.

When deposited funds are exchanged on a dollar-for-dollar basis with other banks in the CDARS Network, the relationship institution can use the full amount of a deposit placed through CDARS for local lending, satisfying some depositors’ local investment goals or mandates. Alternatively, with a depositor's consent, the relationship institution may choose to receive fee income instead of deposits from other participating institutions. Under these circumstances, deposited funds would not be available for local lending.


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