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Minnesota Community Living May/June 2008

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Worried About the Safety of Your Money?
CDARS Can Give You Peace of Mind
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By Mark Kragness, Anchor Bank

Even though headlines report huge financial losses, large businesses in trouble, and turmoil in various markets, today you can be assured of the security of up to $50 million in FDIC insurance coverage through a service called CDARS (pronounced “cedars,” short for Certificate of Deposit Account Registry Service). CDARS can offer you up to 500 times the standard $100,000 level of FDIC coverage found at most banks.

Since the FDIC (Federal Deposit Insurance Corporation) was created in 1933, no one has lost a single penny in an FDIC-insured account. Because of FDIC insurance, four generations of Americans have been able to sleep soundly knowing that their money is fully protected. Now with CDARS, depositors can protect themselves for up to $50 million, and that means that you can sleep soundly without worrying about your money, too.

CDARS is a deposit placement service. Deposits placed through CDARS meet the pass-through insurance coverage guidelines established by the FDIC. To offer CDARS, a bank must belong to a special network called the Promontory Network. When a customer places a large deposit with a Network member, the bank arranges for the placement of funds into CDs issued by other Network banks – in increments of less than $100,000 to ensure that both principal and interest are eligible for full FDIC protection.

From the customers’ point of view, CDARS is one-stop shopping. Regardless of the number of CDs they receive, CDARS customers work with only one bank, sign only one agreement, and receive one account statement.

Currently, more than 1700 institutions are members of the Promontory Network. CDARS, which was first offered in January, 2003, is endorsed by the American Bankers Association.

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