Salisbury Bank Provides Access to FDIC Insurance on Multi-million-dollar CD Deposits
August 14, 2015
With the U.S. job market recovering at a slower rate than last year, experts are scaling back 2015 growth projections and investors are looking to maximize investment yield without sacrificing security. Treasuries and Money Market Mutual Funds continue to offer attractive interest rates, but, unlike deposit-based funds, they lack FDIC insurance. The FDIC is considered the gold-standard of safety and since its creation in 1933 no depositor has lost a single penny in an FDIC-insured account as a result of a failure.
Certificates of Deposit (CD’s) can earn similar returns, and also provide the peace-of-mind that FDIC insurance conveys. The downside is that, under most conditions, this coverage is capped at $250,000.
Salisbury Bank has the ability to help customers invest millions of dollars safely in CDs with the Certificate of Deposit Account Registry Service (CDARS®). With CDARS, Salisbury Bank can offer up to 500 times the standard level of coverage found at most banks. This allows us to protect depositors for up to $50 million, so they can be assured that their money is secure while it is working hard for them.
To offer CDARS (pronounced “cedars”), a bank must belong to a special network called the Promontory Network. In effect, this network allows banks to spread out accounts to maximize insurance. When a Salisbury Bank customer wishes to purchase CDs in excess of $250,000, the Bank arranges for the placement of funds into CDs issued by other network banks, in increments of less than $250,000, to ensure that both principal and interest are eligible for full FDIC protection. Customers are able to manage all of their funds through one portfolio at Salisbury Bank. Regardless of the number of CDs, CDARS customers work with only one bank, sign only one agreement, and receive one account statement.
Currently, more than 1,700 institutions, including Salisbury Bank, are members of the Promontory Network. First offered in January of 2003, CDARS is endorsed by the American Bankers Association and deposits placed through CDARS meet the pass-through insurance coverage guidelines established by the FDIC.
The Bank can also help customers protect significant assets by utilizing the Insured Cash Sweep (ICS) service. Like CDARS, ICS spreads the assets out among other banks giving customers access to multi-million-dollar FDIC protection on savings and money market deposit accounts. Customers can place funds in both CDARS and ICS. As long as the accounts are under the same tax identification number, the ICS system is programmed to recognize the banks that CDARS was placed with and will place assets at different banks to ensure full FDIC coverage under both services. Salisbury Bank is pleased to be able to offer these services to our customers.
Salisbury Bank is a full-service community bank headquartered in Lakeville, Connecticut and presently operates full service branches in Canaan, Lakeville, Salisbury and Sharon, Connecticut; Great Barrington, Sheffield and South Egremont, Massachusetts; as well as Dover Plains, Fishkill, Millerton, Newburgh, Poughkeepsie, and Red Oaks Mill, New York. The Bank has been serving families and businesses for over 160 years and offers a full range of consumer and business banking products and services as well as trust and investment services.