Certificates of Deposit
In it for the long haul.
CDs are an excellent way to keep your money safe and secure while earning a competitive interest rate. If you do not need immediate access to your funds, a CD typically offers higher rates than savings and money market accounts. The longer the term, the higher the interest.
- Higher rate of interest than a traditional savings or money market account
- Guaranteed fixed interest rate for the duration of your term
- No monthly fees
- FDIC-insured up to the allowable limits
Certificate of Deposit Account Registry Service
CDARS® is one of the safest and smartest investment vehicles for investors looking to protect their large-dollar investments while earning CD-level returns that may compare favorably to Treasury and money-market-fund yields. CDARS offers multiple benefits to investors who want to combine the security of access to FDIC insurance with the convenience of working directly with just one financial institution.
- Using the CDARS service, you can access multi-million-dollar FDIC insurance on CD investments.1
- You work directly with our financial institution.
- You negotiate one interest rate per maturity on CD investments placed through CDARS. There is no need to negotiate multiple rates or manually tally disbursements for each CD.
- You receive one regular statement detailing your CD investments. You no longer need to manually consolidate statements at the end of each month, quarter, or year.
- You will not be charged annual fees, subscription fees, or transaction fees for using CDARS. The rate you see is the rate you get.
- Because CDARS deposits are eligible for FDIC protection, you may not need to continually collateralize your deposits. This can eliminate the time-consuming task of tracking changing collateral values on a recurring basis.2
- You can select from various maturities – ranging from 4 weeks to 260 weeks (5 years) – and choose the terms that best suit your investment needs.
- Your funds can support lending initiatives, including special development projects that strengthen your local community.3
- Investing through CDARS can be a strong alternative to Treasuries. Like Treasuries, FDIC insurance is backed by the full faith and credit of the U.S. government.
CDs placed through CDARS
- Access to multi-million-dollar FDIC insurance
- The ease of working through one trusted relationship, earning one rate per maturity and receiving consolidated statements
- The ability to forego ongoing collateral tracking
- The power of daily compounding
- A finite maturity date (in contrast to auction-rate or some adjustable-rate securities)
- Available for investors and institutional investors such as corporations, foundations and endowments
Frequently Asked Questions
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. 4 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 deposit with BNC Bank—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 BNC Bank 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. 5
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® Reciprocal SM transactions only.)
Is my account information safe?
Your account information is protected and your relationship remains between you and BNC Bank.
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.
CDARS CDs are considered bank deposits. They are not DTC eligible and, currently, no secondary market exists. Early withdrawals are available, but require the payment of a substantial penalty.
You should compare the current rates and features of CDs (including CDs placed through the CDARS service) to other investment alternatives. Past performance may not be representative of future performance or success.
Limits apply. If a depositor is subject to restrictions with respect to the placement of funds in depository institutions, it is the responsibility of the depositor to determine whether the placement of the depositor’s funds through CDARS or a particular CDARS transaction satisfies those restrictions. Funds may be submitted for placement only after a depositor enters into a CDARS Deposit Placement Agreement with our bank. The agreement contains important information and conditions regarding the placement of funds by our bank through CDARS.
CDARS is a registered service mark of Promontory Interfinancial Network, LLC.