Getting Convenience and Security through the CDARS program

Many investors who invest more than $100,000 in a certain institution is plagued simply because the FDIC can no longer insure their account. The usual course of action if they want to invest this much is that they need to create multiple accounts for the FDIC to insure the whole amount. But with the CDARS investors do not need to work quite as hard.

What are CDARS? CDARS mean Certificate of Deposit Account Registry Service.  This is a service that allows investors to invest more than the maximum amount but still be insured by the Federal Deposit Insurance Corporation. The insurance can reach up to $50 million. Usual accounts are only insured for $250,000 per account but because of the CDARS, investors now are able to become insured without actually making multiple accounts. 

The CDARS are actually a network of participating institutions that offer investors the convenience of dividing the invested money among the institutions so that each institution will have an account that is insured by the FDIC. For example, if an investor wants to invest $1 million dollars in an institution that offer CDARS. These institutions will now divide the $1 million among themselves so that the whole amount can be insured. Usually each institution will have the maximum amount that they can be insured.

What usually happens here is that your main bank will contact other institutions who are members of the CDARS program. They cooperate with each other so that the amount investors have invested can be properly insured. Information from all of them will be consolidated into a single bank account. This benefits the investor primarily through convenience.

There are three things that you can trust when using CDARS and those three are the promise of the program. These three things are the one bank, one rate            and one statement. Basically this means that no matter how many banks an investor’s money is connected with, they would still be dealing with one bank. That bank is the one that the investor went into the agreement with. This means that you do not need to go to the different allied institutions to conduct your business.

The second promise, one rate, means that investors do not need to think about how other companies would treat your investments. No matter how many institutions involved into protecting their accounts, they will still be under the same terms and conditions of the agreement they have made with their banks. The agreement made with investors will be the priority of the CDARS program.

This can both be a positive and negative since rates differ from institution to institution. On the bad side, this means that investors would not be affected if other institutions enjoy a higher rate than the bank that they are using and also there is also a chance that your company might also suffer low rates. If this is the case then the whole investment suffers. The good side to this is that they would not also be affected if another allied institution suffers from low rates.

The last promise that the CDARS program offer its investors is that they will be issuing one statement in which they can all accounts can be seen. They do not need to go to each allied institution in order to be given a statement since they will be consolidating them all and will put it in one bank account for their convenience.

CDARS have two primary advantages. The first one is security and the second one is the convenience. Individuals who value these two will find the program to be for their benefit and the service, they will find to their satisfaction.