The economy over the past several years has led to more conservative investment decisions, with the primary focus being principle preservation strategies.
But say you want to protect a large deposit – say, $1 million? That amount grossly exceeds the $250,000 limit imposed by the Federal Deposit Insurance Corporation, or FDIC, for deposits in a single bank.
One way to insure large deposits is through the Certificate of Deposit Account Registry Service, or CDARS. CDARS allows you to place deposits in excess of $250,000 into a single bank while still taking advantage of the security and insurance offered by the FDIC.
How does the FNB Fox Valley CDARS program work?
1. You sign a CDARS Deposit Placement Agreement and deposit money with FNB Fox Valley
2. Your funds are placed using the CDARS service
3. Your CDs are issued by other banks in the CDARS network
4. You receive confirmation from our bank of your CDs
5. You receive consolidated interest payments and statements from us
Where are your dollars deposited?
Deposits are made in one of approximately 3,000 CDARS member banks; how yours is disbursed is determined by the bank where the deposit is initiated. Depositors can, however, exclude a bank in which he or she does not want to place deposits. For instance, you’d exclude a bank at which you already have deposits in order to preserve full FDIC coverage.
Who takes advantage of CDARS?
Businesses of all sizes, from sole proprietorships to public and private corporations, have trusted their cash deposits to CDARS; public funds – for instance, municipalities and state funds – are placed in the network, too. Nonprofits take advantage of CDARS because of the security of the principle deposit, and individuals use CDARS as a way to protect retirement money, grow future endowments, or use it as a vehicle for estate planning.
For more information on CDARS through FNB Fox Valley, please email Kathy Blumreich or call us at (920) 729-6919.