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CDARS Explained: What It Is and How It Works

Recent bank failures have many Americans on edge. Learn about how we can help protect your money and peace of mind with CDARS.

June 09, 2023 | Mady Giacin

Smiling red-haired woman pouring coffee behind a counter

FDIC coverage limits for bank deposits has been a hot button topic lately, and rightfully so. You expect your bank to protect your money the same way you would - all of it.

So what happens when your deposit balance goes beyond the maximum FDIC insurance limit? Are your funds at risk? What should you do? At OMB, we offer an invaluable tool to help safeguard your money with FDIC insurance coverage for up to $50 million.

It’s a product called CDARS, and here’s how it can help you, whether you’re an individual or a business owner.

A Quick History of the FDIC

The Banking Act of 1933 was signed into law in response to The Great Depression and the financial toll it had taken on Americans. Part of this act established the Federal Deposit Insurance Corporation, which currently provides $250,000 of insurance per depositor per eligible account as a mechanism to prevent the bank runs that plagued the industry nearly 100 years ago.

What is CDARS?

Many businesses have operating accounts that surpass the maximum FDIC insurance amount. If that’s the case for your business, there are solutions that can provide additional coverage above this $250,000 threshold – one of which is the Certificate of Deposit Account Registry Service®, or CDARS.

CDARS is a product from proven technology company IntraFi, the largest provider of FDIC-insured deposit services with more than 3,000 member financial institutions nationwide.

How CDARS Works

When your bank places your funds in CDARS, your excess deposits are sent from your deposit account to certificate of deposit accounts at member institutions across the country in amounts below the standard FDIC limit.

As a result, all the funds up to $50 million remain covered by FDIC insurance. Both the principal and interest are protected and remain backed by the full faith of the U.S government.

There are also several convenient options to choose from when deciding the maturity of your CDARS and how you would like your interest proceeds paid, whether it’s directly to you or placed into your deposit account.

Any bank offering CDARS should be willing to provide transparent, detailed reporting and monthly bank statements. In addition to these statements, you will also have year-end tax forms provided to you so you can enjoy a seamless experience come tax time or financial planning for the upcoming year.

The convenience of CDARS means you won’t have to manage multiple bank relationships, track collateral, or worry about uninsured deposits. An added benefit is the boon it provides the local economy, too. When making a large deposit through CDARS, your money could be used to help fund local lending and public services in your community.

Who is Eligible for CDARS?

CDARS is for large depositors of all types that want to earn interest on their funds, while also looking to increase their FDIC coverage. If protecting your hard-earned money while working with a community-minded bank is your goal, CDARS might be perfect for you.


OMB is a proud member of the IntraFi network and specializes in providing CDARS to businesses, corporations, non-profits, school districts and municipalities. By taking advantage of this unique product, you’ll benefit from leveraging the FDIC coverage of many banks while dealing exclusively with OMB and our concierge-level service from our experienced Treasury Services team.

Rest easier knowing your hard-earned money is safe and insured with CDARS. Contact us today if you have questions or simply want to know more.

For an even deeper dive about CDARS and other solutions for high-dollar insurance coverage, check out our free in-depth whitepaper here.

OMB and its affiliates do not provide legal, tax or accounting advice. You should consult your legal and/or tax advisors before making any financial decision.

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