FDIC Options for Large Corporate or Personal Cash Holdings

by Larson Gross

ARTICLE | March 13, 2023

In light of the Silicon Valley Bank chatter this past week, we wanted to remind you that if you are looking for FDIC options for large corporate or personal cash holdings, we recommend talking with your Financial or Private Wealth Advisor about what Certificate of Deposit Account Registry Service (CDARS) programs are available with your financial institution.

What is a CDARS?

The Certificate of Deposit Account Registry Service (CDARS) is a program that allows individuals and businesses to invest in FDIC-insured certificates of deposit (CDs) that are spread across multiple banks through a single financial institution.

How it Works

When an investor participates in the CDARS program, their funds are divided among several banks, each holding an FDIC-insured CD in an amount of up to $250,000. This means that the investor’s funds (both principal and interest) are insured up to the maximum amount by the FDIC (currently $250,000) across all of the banks where the CDs are held.

The CDARS program offers several benefits for investors:

  1. Convenience: Instead of having to research and open accounts at multiple banks, investors can work with a single financial institution to access CDs from various banks.
  2. FDIC Insurance: Because the CDs are held in amounts under the FDIC insurance limit at each bank, the investor’s funds are fully insured against loss in case of bank failure.
  3. Competitive rates: By investing in CDs from multiple banks, investors may be able to access better rates than they could get by investing in a single CD from a single bank.
  4. Reduced administrative burden: The CDARS program handles the administrative tasks of opening and managing multiple CD accounts, which can reduce paperwork and hassle for investors.

It’s important to note that investors should always carefully review the terms and conditions of any investment program, including the CDARS program, to ensure that it aligns with their financial goals and risk tolerance.


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