Beginning September 2, HomeStreet Bank customers have access to multi-million dollar federal deposit insurance for Certificates of Deposit (CDs) through the Certificate of Deposit Account Registry Service (CDARS). Customers will now be able to deposit amounts of up to $50 million through CDARS and receive full FDIC coverage.
Founded in 2003, CDARS is a CD deposit placement network with more than 2,200 community and regional banks as members. Through the CDARS program, a customer’s CD deposits that exceed the standard FDIC insurance level at a single institution are placed among other FDIC-insured banks in the network. The funds are split into increments of less than $100,000 and distributed to other member banks, guaranteeing that both principal and
interest are fully insured.
Only banks with the FDIC’s highest rating of “well-capitalized” may participate in the network.
“We are confident this will be a great convenience for customers who previously opted to take their higher-balance deposits to more than one bank in order to guarantee that their funds were fully FDIC-insured,” said Paulette Lemon, retail banking director for HomeStreet Bank.
Customers work with their primary bank to select a CD term(s) ranging from four weeks to several years in length. A single rate of interest set by their primary bank applies to the customer’s entire portfolio, and customers get one statement detailing all of their CD investments.
“Through CDARS, customers can now deal solely with their primary bank, and they’ll have the security of knowing that their CD deposits are fully insured at much higher limits,” Lemon continued. “In short, it will be much easier for depositors with greater balances to manage their accounts.”
The CDARS program is endorsed by the American Bankers Association.