How Does CDARS Work?
Looking for a way to keep large deposits safe? Ask us about CDARS® (Certificate of Deposit Account Registry Service®).
It’s a great solution for:
- Nonprofit organizations
- Public funds managers
- Financial advisors
- Credit unions
- Individual Retirement Accounts (IRAs)
With the CDARS program, you can receive up to $5 million in FDIC protection through Security State Bank. There are few guarantees in life – FDIC insurance is one of them. CDARS can be a valuable cash management or longer-term investment tool for you or your business.
It’s one-stop shopping. With help from the CDARS Program, you can access:
- Safety – Your money can receive up to $5 million in FDIC insurance coverage.
- Convenience – You work directly with us. You earn one interest rate and receive one regular statement. Private investors receive one year-end tax form.
- Community Investment – The full value of your money can support lending opportunities in your local community.
- Certificate of Deposit-Level Rates – Your money earns CD-level returns which may compare favorably with other investment alternatives, including Treasuries, corporate sweep accounts, and money market mutual funds.
How does CDARS work?
We are members of a special network. When you place a large amount with us, we place your funds into certificates of deposit issued by other banks in the network – in increments of less than $250,000 – so that both your principal and interest are eligible for complete FDIC protection. With help from a sophisticated matching system, we exchange deposits with other banks that are members of the network.
These exchanges, which occur on a dollar-for-dollar basis, can bring the full amount of your original deposit back to our bank. As a result, we can make the full amount of your deposit available for community lending purposes.
 Note for Network Members: Investment restrictions imposed by statutes, regulations or policies may limit the authority of public funds managers to invest through CDARS. Public fund managers in the following states, among others, may be eligible to invest through CDARS: AK, CO, CT, GA, HI, IL, KS, KY, ME, MN, MO, NE, NH, NV, OK, PA, SC, SD, TN and VT. Even in these states, the public funds manager must check applicable restrictions to ensure that deposits are eligible for placement using CDARS.
Contact the Security State Bank nearest you for more information.