While your CDs may come from financial institutions across the country, your funds can still be used locally. This is because members of the CDARS network exchange deposits on a dollar-for-dollar basis to ensure that the same amount of funds placed on the network is returned to your financial institution. This means that your initial deposit amount is able to stay in your financial institution and be used by you on site. CDARS, short for certificate of Deposit Account Registry Service, is a simple and convenient way to make full use of FDIC insurance for deposit amounts in excess of $250,000. If you invest in certificates of deposit (CD) and want to stay below the insurance limits set by the FDIC with your local bank, the CDARS program can help. The program allows investors to deposit money in different banks without having to go from one bank to another to deposit money. CDARS is offered in all 50 states as well as Puerto Rico, the District of Columbia and Guam. There are several reasons why companies choose to invest funds in the CDARS program. One of the biggest advantages is the ability to combine the comfort of working with a single bank with the security of access to FDIC insurance of more than $250,000.
With this program, investors have access to millions of dollars in FDIC insurance for low-risk CD investments. Each CD installation includes an interest rate per maturity that can be negotiated at the time of deposit. There are also no hidden fees, including annual fees, transaction fees or subscription fees. The rate you have agreed to is the price you receive. CDARS is one of the safest options for investors who want to protect their investments while continuing to earn interest only with CDs. Investing in the program can be a smart alternative to U.S. Treasuries, and like Treasuries, CDARS is supported by the U.S. government.
You may be concerned about how the FDIC feels about these programs. Fortunately, the FDIC does not just recognize the deposit placement service, it has even encouraged it at times. The CDARS program has been extensively tested and the service is recognized by both FDIC rules and state statutes. The CDARS service was designed to meet the FDIC`s requirements for the protection of pass deposits. The investment of your funds is done in stages below the standard FDIC insurance maximum of 250,000 USD, so that capital and interest are eligible for FDIC insurance. If you work directly with a single institution, many of you can access insurance coverage. And you only receive a regular monthly statement. The funds are deposited into deposit accounts with other ICS networking institutes via ICS networks, in accordance with the DATA Protection Authority of the ICS. The program also has other benefits, such as the lack of permanent protection. Since CDARS deposits are eligible for FDIC protection, there is no need to guarantee your deposits.