CDARS One-Way Sell for Banks
WHAT IS CDARS ONE-WAY SELL?
Using CDARS®, Promontory Network members can offer customers access to FDIC insurance beyond $250,000 on funds placed in CDs. With CDARS® One-Way Sell®, CDARS Network members can attract multi-million-dollar deposits that might cause concentration issues or lead to excess liquidity and move those deposits off balance sheet by selling the underlying funding to banks that want funding. (When banks want to grow on-balance-sheet deposits, the CDARS Reciprocal option is available, enabling banks to exchange deposits with other banks on a dollar-for-dollar basis. Banks can switch back and forth between keeping and selling deposits as their liquidity needs change.)
WHY DO BANKS CHOOSE CDARS ONE-WAY SELL?
With CDARS One-Way Sell, a bank can
- Earn noninterest income by selling excess deposits to other Promontory Network members
- Increase market share by encouraging safety-conscious depositors to consolidate their CD investments with just their bank
- Add large deposits without increasing concentration risk
- Maintain a consistent presence in the CD market without causing balance sheet management problems
- Improve return on assets and return on capital ratios by keeping deposits off balance sheet and generating noninterest income
- Attract safety-conscious customers by offering FDIC insurance in place of ongoing collateralization
HOW DOES CDARS ONE-WAY SELL WORK?
Banks that offer CDARS are members of the Promontory Network. When a bank places a customer's deposit through CDARS, the funds are placed into CDs at other FDIC-insured member banks. By working directly with just one bank, a depositor can access FDIC coverage from many.
With CDARS One-Way Sell, banks can earn fee income for placing deposits with banks that need funding. The relationship bank sets the interest rate and maintains ownership of the depositor relationship.
Depositors like CDARS because it offers the peace of mind that comes with access to multi-million-dollar FDIC insurance, returns, and the convenience of working directly with just one bank. With all CDARS transactions, the customer’s confidential information remains protected.
DISCOVER WHAT DIFFERENTIATES CDARS
Download a summary of how CDARS differs from competing offerings
Promontory Network will use your information solely to provide you with information about Promontory Network services. We will not provide your personally identifying information to third parties.
In addition, banks can find out more about CDARS by registering for a free webinar, ICS and CDARS: Taking Advantage of New Opportunities.
Use of the CDARS service is subject to the terms, conditions, and disclosures set forth in the CDARS-ICS Participating Institution Agreement and the applicable Deposit Placement Agreement. Limits apply. CDARS and One-Way Sell are registered service marks of Promontory Interfinancial Network, LLC.