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Established Contributor
CanDoAttitude
Posts: 878
Registered: ‎04-08-2008

CDARS - A Great Way to Get $50 Million of FDIC Insurance...

Hello Everyone,

 

As many of you know, when President Bush signed the rescue package into law

on Friday the FDIC (Federal Deposit Insurance Corporation) raised its insurance

limit on bank accounts from $100,000 to $250,000 .

 

But what if you sold your house, sold your business, received an inheritance, etc

and the cash amount exceeds $250,000? If you'd like to keep all that cash handy

in your local bank and still enjoy FDIC insurance protection, the answer is CDARS. 

 

CDARS stands for Certificate of Deposit Account Registry Service. This service allows

you FDIC insurance up to $50 million. You just go to your local bank, sign a CDARS

agreement and then deposit your cash into a CD at a guaranteed rate.

 

Here is the link to the website for more information:

 

http://www.cdars.com 

 

I should point out that this program is primarily for FDIC-insured banks, but credit unions

may...and I emphasize MAY...offer CDARS on a credit union-by-credit union basis. 

For example, my CU (Navy Fed) doesn't offer CDARS but your local CU might. Just

stop by or call them to find out. And incidentally, credit unions are insured by the NCUA

(National Credit Union Administration) and they also raised their insurance limit to 250k. 

 

I know the numbers discussed here might sound unrealistic to most, but given the

current financial situation some folks might elect to keep all of their holdings in cash

until the climate improves. And it's always good to know what options are available

to you in advance so you don't scamble around trying to figure out how to keep your

money safe.

 

I hope you find this information helpful. Enjoy the day!

 

 

CanDo

 

"The right attitude is everything"

Super Contributor
MidnightVoice
Posts: 8,158
Registered: ‎03-25-2007

Re: CDARS - A Great Way to Get $50 Million of FDIC Insurance...


CanDoAttitude wrote:

Hello Everyone,

 

 

But what if you sold your house, sold your business, received an inheritance, etc

and the cash amount exceeds $250,000?


Put it in more than one bank?

The slide from grace is really more like gliding
And I've found the trick is not to stop the sliding
But to find a graceful way of staying slid
Established Contributor
CanDoAttitude
Posts: 878
Registered: ‎04-08-2008

Re: CDARS - A Great Way to Get $50 Million of FDIC Insurance...

[ Edited ]

Hey MV,

 

That's always an option, but if you go thru a local bank that offers

CDARS they do that for you. This way, you only go to 1 bank but

they spread your money over more than one bank within the CDARS

network. So you spread your risk but you only have one point of contact...

which is your local bank.

 

Example: You enter into a CDARS agreement for $400,000 at your local bank

@ 5.5% for 12 months. The first 250k goes into one CD and the remaining

150k goes into another CD within the CDARS network.  But one agreement

insures the entire 400k and you only need to go to one place (your local bank)

to make this happen.

 

More details are available on the CDARS website, but that's a great question.

Thanks!!!

 

CanDo

 

"The right attitude is everything"

Message Edited by CanDoAttitude on 10-06-2008 10:32 AM
Moderator
Moderator
Lel
Posts: 5,268
Registered: ‎03-18-2008

Re: CDARS - A Great Way to Get $50 Million of FDIC Insurance...

Fortunately for me, I don't have to worry about this!

Super Contributor
MidnightVoice
Posts: 8,158
Registered: ‎03-25-2007

Re: CDARS - A Great Way to Get $50 Million of FDIC Insurance...


Lel wrote:

Fortunately for me, I don't have to worry about this!


 

I doubt that many here do either!!
The slide from grace is really more like gliding
And I've found the trick is not to stop the sliding
But to find a graceful way of staying slid
Established Contributor
CanDoAttitude
Posts: 878
Registered: ‎04-08-2008

Re: CDARS - A Great Way to Get $50 Million of FDIC Insurance...

The reason I posted this information is because about 2-3 weeks ago

a media story was reported that the FDIC might have to ask the Treasury

for additional funding if the economy continued to deteriorate and folks

started pulling money out of their local banks for fear that it wouldn't

be protected. This led to the temporary increase in FDIC (and NCUA)

insurance protection to $250,000. 

 

I'm the first to admit that 250k of insurance is more than adequate for

most people, but for others CDARS offers a good option so they don't

have to deposit their money all over town in several different places.

You never know what the future will bring....

 

 

CanDo

 

"The right attitude is everything"


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