CDARS® Frequently Asked Questions
How is CDARS pronounced?
CDARS is pronounced, “cedars.”
Can I speak to a Network member about its experience using the CDARS service?
Several members of the Promontory Network would be happy to talk with you about how CDARS has created positive results for their institutions. Please call (866) 776-6426 (toll-free) and select Treasury Desk for information on Network member experiences, or get an overall snapshot of how institutions that offer CDARS are using it by visiting the Testimonials page to read their comments.
Whom should I contact to learn about joining the Promontory Network?
It is easy to become a member of the Promontory Network – enabling you to offer CDARS, as well as other member benefits. To find out more, contact us at firstname.lastname@example.org or (866) 776-6426 (toll-free) for the appropriate Promontory Regional Director, who will help you to complete the process of joining.
Does Promontory provide support after my bank joins the Promontory Network?
Yes. Promontory provides implementation and operational support to all Network member institutions. A business development team, which includes a Regional Director and a Treasury Desk Manager, is assigned to every Promontory Network member institution to assist the member in connection with the member's sales and marketing activities. Client Services is available for operational assistance and troubleshooting. Additionally, Promontory provides accounting training, support webinars, and an online fulfillment site that enables members institutions to download customized, turnkey marketing materials.
Who provides the additional FDIC insurance?
The FDIC insurance coverage available through CDARS is provided by Promontory Network members who issue your customers’ CDs, each in amounts less than the standard FDIC insurance maximum. Your customers get the ease of working directly with just your institution while receiving FDIC coverage from many.
How much can I place for a single depositor right away?
While CDARS is currently available to provide access to multi-million-dollar FDIC insurance coverage and while overall limits and weekly sub-limits do apply, with notice, we frequently can accommodate requests to place tens of millions of dollars at a time. Just contact Promontory's Treasury Desk at (866) 776-6426 to initiate a discussion. Network members can access the current limits by visiting the secure portion of the Promontory Transaction & Reporting Portal's Limits and Product Terms.
Does the FIL-29-2010 that was issued by the FDIC on Monday, June 7, 2010 address the Certificate of Deposit Account Registry Service (CDARS)?
We are not a “third-party affinity group" or "trade association” referenced in the letter. However, the letter more broadly discusses principles that apply to the placement of deposits. We have always operated CDARS in accordance with the principles outlined in the letter, and will continue to do so. For more information, please click here.
Is the CDARS® service safe to use? Has it been thoroughly tested?
The CDARS service has been thoroughly tested (with many billions of dollars) and has been designed so as to comply with every relevant FDIC requirement. Over the past decade and a half, thousands of depositors have successfully submitted funds for placement through CDARS.
Use of the CDARS service makes it possible for depositors to gain access to multiple millions of dollars of FDIC insurance on funds placed in certificates of deposit. And, no depositor has ever lost a penny of FDIC-insured deposits.
The service is offered by Promontory Interfinancial Network, a trusted fintech provider chosen by more than 3,000 banks across the nation, and has received an exclusive endorsement from the American Bankers Association through its subsidiary, the Corporation for American Banking, following a comprehensive due-diligence review process.
Has the FDIC weighed in on the usage of such programs?
Since the creation of the FDIC more than eight decades ago, depositors have always had the option of depositing funds at multiple FDIC-insured banks to gain access to deposit insurance coverage in excess of the standard single-bank insurance amount, which is now $250,000. The FDIC has always known of this practice and at times has even encouraged it. Deposit placement services, such as Promontory Interfinancial Network’s CDARS service (and its Insured Cash Sweep® service, which enables funds to be placed in demand deposit accounts, money market deposit accounts, or both), help depositors to achieve the same familiar result more easily and with added benefits, such as the opportunity to promote local lending through reciprocal deposits that the depositor’s bank receives in return for deposits placed at other banks.
The FDIC routinely acknowledges that deposit placement services can be used to provide access to expanded deposit insurance coverage. For example, in a November 2015 “frequently asked questions” document, the FDIC specifically describes how a participating bank can place funds at other participating banks through a bank network to give its customer full insurance coverage on a deposit in excess of $250,000.
Some banks receiving deposits placed through a Promontory service have failed during Promontory’s history, and every resulting claim for deposit insurance has been paid in full by the FDIC.
CDARS (like Insured Cash Sweep) has been thoroughly tested, and reciprocal deposit placement services are recognized both in the FDIC regulations and in state statutes and regulations throughout the United States.
Placement of customer funds through the CDARS service is subject to the terms, conditions, and disclosures set forth in the agreements that a participating institution’s customer enters into with that institution, including the applicable Deposit Placement Agreement. The depositor is responsible for excluding banks at which he/she has other deposits in the same insurable capacity from eligibility for placement through CDARS. If a depositor is subject to restrictions with respect to the placement of funds in depository institutions, it is the responsibility of the depositor to determine whether the placement of the depositor’s funds through CDARS, or a particular CDARS transaction, satisfies those restrictions. With a depositor’s consent, a bank may choose to receive fee income instead of deposits from other banks. Under these circumstances, deposited funds would not be available for local lending. CDARS is a registered service mark of Promontory Interfinancial Network, LLC.