CDARS places certificates of deposit across participating banks, potentially expanding aggregate FDIC coverage when ownership and recordkeeping rules are satisfied.
CDARS, short for Certificate of Deposit Account Registry Service, is an IntraFi deposit-placement service that places a customer’s funds into certificates of deposit issued by multiple participating banks. The arrangement can provide access to aggregate FDIC coverage across those banks when each deposit and the supporting records satisfy current insurance rules.
FDIC does not insure CDARS as a service, and IntraFi is not an insured bank. FDIC insurance applies separately to eligible deposits at each issuing network bank.
The customer enters a deposit-placement arrangement through a participating relationship institution. Under the applicable instructions and agreements:
The depositor may be able to exclude particular banks from receiving funds. That matters when the depositor already has accounts at a possible receiving bank or is subject to an institutional, legal, or policy restriction.
flowchart LR
A["Depositor"] --> B["Relationship institution"]
B --> C["CDARS allocation and custody records"]
C --> D["Network bank A issues CD"]
C --> E["Network bank B issues CD"]
C --> F["Network bank C issues CD"]
D --> G["Consolidated customer reporting"]
E --> G
F --> G
Deposit insurance is calculated by depositor, insured bank, and ownership category. A network placement does not receive a separate category merely because it arrived through CDARS.
Assume a business has a $200,000 network-placed CD and a separate $75,000 deposit in the same business-account category at the same issuing bank.
| Balance at the issuing bank | Amount |
|---|---|
| Network-placed CD principal | $200,000 |
| Separate direct deposit | $75,000 |
| Aggregate before accrued interest | $275,000 |
Amount above a $250,000 standard maximum | $25,000 |
The $25,000 excess could be uninsured, and accrued CD interest can increase that exposure. An allocation intended to remain within the standard maximum would need to exclude that receiving bank or reduce the amount placed there.
This is why a simple “four banks times $250,000 equals $1 million” example is unreliable. Allocation must account for other same-bank balances, accrued interest, ownership category, and changes before maturity.
In a custodial arrangement, the FDIC may recognize the customer as the beneficial owner even though an agent or custodian holds the account. FDIC guidance explains that pass-through insurance is not a separate ownership category. Coverage is determined as though the owner held the deposit directly, provided the applicable ownership, disclosure, and recordkeeping requirements are met.
If required records do not identify the beneficial owner and ownership interest, coverage can be calculated differently. In a bank failure, the FDIC may need information from the placement agent or custodian before it can determine coverage and payment.
| Feature | CDARS | Direct CDs at several banks | ICS |
|---|---|---|---|
| Deposit type | CDs | CDs | Demand deposit or money market deposit accounts under service terms |
| Bank relationships | One relationship institution plus network issuers | Separate direct relationships | One relationship institution plus network banks |
| Maturity | CD terms apply | Each CD’s terms apply | Transaction-account terms apply |
| Reporting | Consolidated program records | Separate bank records | Consolidated program records |
| Insurance analysis | Per owner, category, and issuing bank | Per owner, category, and bank | Per owner, category, and receiving bank |
| Main operational dependency | Placement and custody records | Customer’s own records | Placement and custody records |
ICS is a separate IntraFi service. It should not be described as CDARS merely because both use a bank network.
Some network transactions are reciprocal: the relationship institution places customer funds at other banks and receives matching deposits through the network. Other placements can move funds away without a matching reciprocal amount.
The distinction can affect how a bank reports and manages the funding under brokered- and reciprocal-deposit rules. It does not change the depositor’s need to verify the actual issuing banks, ownership records, and insurance aggregation.
CDARS uses CDs, so funds are tied to CD maturities and program instructions. Early access may be unavailable, limited, or subject to the placement agreement and issuing-bank terms. A customer should not assume that all network CDs can be liquidated on demand or sold in a secondary market.
IntraFi disclosures also caution that balances at the relationship institution before placement or after withdrawal settlement can exceed the insurance maximum. The exact timing of placement and withdrawal matters when continuous coverage is required.
This article provides general financial education, not personalized banking, investment, tax, legal, accounting, or deposit-insurance advice.