How can you safely deposit the funds of a condominium association, development entity, municipality or any entity  which needs to know that there is little or no risk of loss to the deposited funds ? The Federal Deposit Insurance Corporation (FDIC) temporarily increased deposit insurance for individuals to $250,000.  The increased deposit insurance is scheduled to expire on December 31, 2009.  Carving up the deposit into separate entities is cumbersome and can be difficult to manage and maintain.

Along comes the Certificate of Deposit Account Registry Service (CDARS).  CDARS is owned and opperated by Promontory Interfinancial Network, LLC.  Participating banks enter into a CDARS agreement in which the lead bank serves as the account custodian. CDARS then distributes the funds around to its participating banks to be invested in certificates of deposit in amounts less than the FDIC limitations ($100,000 for deposits maturing after December 31, 2009 and $250,000 for deposits maturing prior to December 31, 2009). CDARS will permit the application of FDIC deposit insurance on single deposits up to $50 million.  The benefit to the depositor is working with one bank, one interest rate, one maturity date and one statement.

In these uncertain times for banks, all individuals, businesses, not for profits and municipalities should review their accounts and determine if there is a need to take advantage of the protections offered by CDARS.