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How ICS and CDARS Work

When you have deposits at a single bank in a single ownership capacity, then you have access to up to $250,000 in FDIC insurance at that bank. But by using ICS®, the Insured Cash Sweep® service, and CDARS®, you can access multi-million-dollar FDIC protection by working directly with just one bank.

Financial institutions that offer Insured Cash Sweep and/or CDARS are members of the ICS Network and/or the CDARS Network. When you place a large deposit with your bank using ICS or CDARS, that deposit is divided into amounts under the standard FDIC insurance maximum of $250,000 and is placed in deposit accounts at other ICS Network or CDARS Network banks. Funds are placed into demand deposit accounts (using the ICS demand option), money market deposit accounts (using the ICS savings option), or into CDs (using CDARS). By placing your funds in increments below the standard FDIC insurance maximum of $250,000, both principal and interest are eligible for FDIC insurance.

By working directly with just one participating bank, you can access FDIC coverage from many. And you can enjoy the convenience of receiving one monthly statement per service from your bank.

How ICS and CDARS Work


When you're ready to take advantage of Insured Cash Sweep and/or CDARS, there are 5 easy steps to get started.

ICS

  1. You sign an ICS Deposit Placement Agreement (ICS DPA) and a custodial agreement.

  2. You identify an existing transaction account (or set up a new one) to be used with each ICS option.

  3. Funds are placed into deposit accounts at other ICS Network institutions using ICS in accordance with the ICS DPA.

  4. Using an online tool specially developed for ICS, you can see where your funds are at all times along with balances and other important information.

  5. You receive a monthly statement from your bank detailing ICS account activity.

CDARS

  1. You sign a CDARS Deposit Placement Agreement (CDARS DPA) and a custodial agreement.

  2. You deposit money with your bank.

  3. Funds are placed using CDARS, and your CDs are issued by other CDARS Network institutions in accordance with the CDARS DPA.

  4. You receive confirmation of your CDs from your bank.

  5. You receive a monthly statement from your bank detailing CDARS account activity.
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Placement of funds through the ICS or CDARS service is subject to the terms, conditions, and disclosures in the service agreements, including the Deposit Placement Agreement (“DPA”). Limits apply and customer eligibility criteria may apply. In the ICS savings option, program withdrawals are limited to six per month. Although funds are placed at destination banks in amounts that do not exceed the FDIC standard maximum deposit insurance amount (“SMDIA”), a depositor’s balances at the relationship institution that places the funds may exceed the SMDIA (e.g., before ICS or CDARS settlement for a deposit or after ICS or CDARS settlement for a withdrawal) or be ineligible for FDIC insurance (if the relationship institution is not a bank). As stated in the DPA, the depositor is responsible for making any necessary arrangements to protect such balances consistent with applicable law. If the depositor is subject to restrictions on placement of its funds, the depositor is responsible for determining whether its use of ICS or CDARS satisfies those restrictions. ICS, Insured Cash Sweep, and CDARS are registered service marks of Promontory Interfinancial Network, LLC.