The Certificate of Deposit Account Registry Service (CDARS), was a US for-profit service that broke up large deposits (from individuals, companies, nonprofits, public funds, etc.) and placed them across a network of more than 3000 banks and savings associations around the United States. This allowed depositors to deal with a single bank that participates in CDARS but avoid having funds above the Federal Deposit Insurance Corporation (FDIC) deposit insurance limits in any one bank.[1]
In 2021, the service was reconfigured with several other offerings of IntraFi Network (formerly Promontory Interfinancial Network) into IntraFi Network Deposits and IntraFi Funding. [2]
How it works
editThe service can place multiple millions in deposits per customer and make all of it qualify for FDIC insurance coverage.[3][4] A customer can achieve a similar result, as far as FDIC insurance is concerned, by going to a traditional deposit broker or opening accounts directly at multiple banks (although depending on the amount this could require a lot more paperwork). With IntraFi deposits, the customer’s local bank sets the interest rate that will be paid on the entire deposit amount, and the customer gets one consolidated statement from that bank.
The FDIC has confirmed that deposits placed through deposit placement service offered by the IntraFi Network are eligible for “pass-through” FDIC insurance.[5] The FDIC has not endorsed any particular method of maximizing FDIC insurance coverage, but states that depositors should “protect all (their) deposits with FDIC insurance.”[6]
References
editSpecific references:
- ^ Bruce, Laura (April 16, 2009). "6 Ways To Insure Excess Deposits". Bankrate. Archived from the original on February 28, 2017.
- ^ IntraFi Network, Virginia Bankers Association https://www.vabankers.org/endorsed-provider/intrafi-network
- ^ Kim, Jane J. (September 18, 2008). "Your Cash: How Safe is Safe?". The Wall Street Journal.
- ^ "CDARS – the Certificate of Deposit Account Registry Service".
- ^ "Increasing Deposit Insurance Coverage for Municipalities and Other Units of General Government: Results of the 2006 FDIC Study". FDIC Quarterly. 2 (1). Washington, D.C.: FDIC. 2008. ISSN 1944-8880.
- ^ FDIC Consumer News, Winter 2006/2007
General references:
- Expanding FDIC Insurance Past Usual Limits (Television) from abclocal.go.com
- Keeping Your Cash Safe from washingtonpost.com
- Deposit Program Could Prevent Bank Runs from bizjournals.com
- Money Protection Only Goes So Far, So Know The Risks from chicagotribune.com
- The Wall Street Journal Online:
- Covering Your Butt If the Bank Goes Bust from forbes.com
- Six Ideas for Insuring Your Deposits from cnbc.com