CDARS is one of the safest and smartest investment vehicles for investors looking
to protect their large-dollar investments while earning CD-level returns. CDs placed
through CDARS offer:
- Access to multi-million-dollar FDIC insurance.1
- The ease of working through one trusted relationship, earning one rate per maturity,
and receiving consolidated statements.
- Possible relief from ongoing collateralization – since CDARS deposits are eligible
for FDIC protection, you may not need to perform the time-consuming tasks of continually
collateralizing your deposits and tracking changing collateral values on a recurring
- The power of daily compounding.
- A finite maturity date (in contrast to auction-rate or some adjustable-rate securities).
- The ability to have your funds available to support lending initiatives, including
special development projects that strengthen your local community.3
How can deposits greater than the standard FDIC insurance maximum be insured
by the FDIC?
Currently, the FDIC insures up to $250,000 of a customer’s savings deposits in a
given insurable capacity at an FDIC-insured depository institution.
So, you can run around to multiple institutions to deposit your funds to receive
the same coverage you can access using CDARS. Or you can place your large-dollar
Bank of Las Vegas
– a member of the CDARS Network. Your deposit is divided into smaller amounts and
placed with other CDARS Network members – each an FDIC-insured institution. Then,
those member institutions issue CDs in amounts under the standard FDIC insurance
maximum, so that your deposit is eligible for FDIC insurance at each member bank.
By working directly with one financial institution –
Bank of Las Vegas
– you can receive insurance through many.
Who has custody of my funds?
Funds placed through CDARS are deposited only in FDIC-insured banks. We act as custodian
for your CDARS deposits, and the sub-custodian for CDARS deposits is The Bank of
New York Mellon (“BNY Mellon”), the largest custodian in the world with total assets
of more than $22 trillion.4
Unique to CDARS, a depositor can obtain a confirmation of records maintained by
BNY Mellon as sub-custodian in order to reconcile those records with the statements
received from us. At any time, as often as desired, a depositor can obtain a certified
statement from BNY Mellon that confirms the exact amount of his or her CDs, including
principal balance and accrued interest, for each FDIC-insured institution that issues
a CD through CDARS.
You can submit a request for the certified statement, along with BNY Mellon’s processing
fee, through us. BNY Mellon will send the certified statement directly to you or
to another party, such as an auditor, designated by you.
How can my funds be used locally if my CDs are issued by financial institutions
all over the country?
When we swap deposits with other CDARS Network members on a dollar-for-dollar basis,
the same amount of funds placed through the Network returns to us. As a result,
the total amount of your original deposit can remain with our bank and be used for
local lending. (CDARS® ReciprocalSM transactions only.)
Is my account information safe?
Your account information is protected; your relationship remains between you and
Bank of Las Vegas
What happens if a CDARS Network member bank fails?
Most of the banks that have failed in the United States in recent years were not
CDARS Network members or did not hold any CDARS deposits when they failed. When
a Network member has failed, the bank’s CDs issued using CDARS in most cases have
been transferred to a healthy institution – the FDIC’s preferred method for handling
bank failures. In cases where the FDIC has been unable to find a healthy institution
willing to accept such a transfer, it has arranged for the payment of the insured
principal and accrued interest to the depositors. This payment has usually occurred
in a matter of days.
Please go to http://www.fdic.gov/deposit/index.html
to learn more about FDIC insurance.
 Limits apply. Funds may be submitted for placement only after an investor enters
into a CDARS Deposit Placement Agreement with our bank. This agreement contains
important information and conditions regarding the placement of funds.
 If an investor is subject to restrictions with respect to the placement of funds
in depository institutions, it is the responsibility of the investor to determine
whether the placement of the investor’s funds through CDARS or a particular CDARS
transaction satisfies those restrictions.
 Because deposited funds are exchanged on a dollar-for-dollar basis with other
banks in the CDARS Network, our bank can use the full amount of a deposit placed
through CDARS for local lending, satisfying some investors’ local investment goals/mandates.
Alternatively, with an investor’s consent, our 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.
 As reported by BNY Mellon in December 2009. Please see
CDARS is a registered service mark of Promontory Interfinancial Network, LLC.