What is CDARS and how can it be useful to businesses?
Currently, a business only has FDIC insurance up to $250,000 on interest-bearing accounts per financial institution. Companies who want the security of FDIC deposit insurance for deposits greater than $250,000 can take advantage of CDARS, which allows a business to deposit up to $50 million in certificate of deposit (CD) investments. These CDs can have different maturities and rates. When using the CDARS program, network member banks exchange funds so the equivalent of a client’s original deposit comes back to the originating bank. Interest can be earned on multiple $250,000 CDs with the convenience of working with one financial institution. CDARS allows the entire investment to be fully covered by FDIC insurance as long as the total per entity isn’t more than the CDARS limit. What do businesses need to do to take full advantage of CDARS? Once the CDARS application is complete, the company picks the term and rate that meets its needs, and implements the CDARS investment for the busines
