CDARS Program Explained: FDIC Coverage for Large Deposits
Short answer
CDARS stands for Certificate of Deposit Account Registry Service. It is run by IntraFi and lets one bank split a large CD deposit into pieces under the $250,000 FDIC limit and place them at other FDIC-insured banks in the IntraFi network, so the whole amount can be insured while you deal with one bank and get one statement. IntraFi lists CDARS maturities from 4 weeks to 3 years (intrafi.com, checked October 3, 2026), and your bank, not IntraFi, sets the rate.
CD vs MYGA, after tax
What $100,000 earns in 5 years: CD vs MYGA, after tax
Rates used: CD 4.50%, the top nationally available 5-year CD (DepositAccounts, September 24, 2026); change it to the rate you are offered. MYGA 5.95%, the best A-rated rate we track as of October 13, 2026: Delaware Life Pinnacle Plus 5-year (AM Best A-, negative outlook, 7/31/2026), $100,000 and up, effective October 6, 2026 (Delaware Life rate sheet).
| CD, interest taxed every year | $118,826 |
|---|---|
| MYGA, tax-deferred, before tax | $133,507 |
| MYGA after paying tax on all the interest at withdrawal | $126,136 |
| Tax deferral alone adds about | $674 |
| MYGA ahead of the CD, after tax | $7,310 |
Assumes 22% federal and 0% state income tax, no withdrawals, rates held for the whole term. MYGA interest is taxed as ordinary income when you withdraw it, not as capital gains. Gains taken before age 59 1/2 can owe a 10% IRS penalty, and cashing out early can cost a surrender charge. In an IRA both grow tax-deferred, so the edge there is the rate alone. Bank and credit union deposits are FDIC or NCUA insured up to the limits; a MYGA is backed by the issuing insurer's claims-paying ability and your state's guaranty association up to its limits, not the FDIC. General education, not tax, legal or financial advice.
What CDARS Is and How It Works
CDARS is a deposit-placement service originally developed by Promontory Interfinancial Network (now operating as IntraFi). Member banks participate in a network; when a customer of one member bank deposits a large balance, the bank places that deposit across other member banks in slices of $250,000 or less, ensuring each slice is fully FDIC-insured at the recipient bank.
The customer experience:
- You deposit $2,000,000 with your local bank (a CDARS member).
- Your bank works with the CDARS network to find 8+ recipient banks willing to accept ~$250K each.
- The deposit settles. You have one CDARS statement showing the placements.
- Each placement is a separate CD at a separate FDIC-insured bank, fully insured.
- You receive one consolidated statement, deal with one bank, get one set of tax documents.
CDARS specifically handles the CD (term deposit) product. For demand deposit and money market sweep equivalents, the sister product is ICS (Insured Cash Sweep). See our ICS guide.
Rates expire like milk.
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Coverage Limits: How High Can You Go
CDARS supports very large deposits. The practical limits:
| Deposit Size | Approximate Number of Recipient Banks | Coverage Status |
|---|---|---|
| $500,000 | 2-3 | Fully FDIC insured |
| $1,000,000 | 4-5 | Fully FDIC insured |
| $5,000,000 | 20-25 | Fully FDIC insured |
| $10,000,000 | 40-50 | Fully FDIC insured |
The bank counts are simple division by the $250,000 limit. IntraFi describes the service as access to “millions in aggregate FDIC insurance across network banks” and does not publish one per-depositor maximum on its site, so ask your bank for its cap in writing. IntraFi also states that no depositor has ever lost a penny of funds placed using ICS and CDARS.
Mechanics of the Placement
When you commit funds to CDARS through your bank:
- You choose the term. IntraFi lists maturities from 4 weeks to 3 years.
- You specify the interest rate (single rate applied across all placements).
- Your bank coordinates with CDARS to allocate the funds across recipient banks at that rate.
- The recipient banks receive funding through the network at the agreed rate.
- Your bank handles all customer service; the recipient banks have no direct contact with you.
If you have an existing CD relationship at one of the recipient banks (separate from CDARS), the FDIC limit applies cumulatively. Your CDARS allocation to Bank X plus your direct deposit at Bank X must stay within $250K per ownership category. CDARS allows you to designate banks to exclude from your placement to avoid this overlap.
Rate Comparison vs Direct CD
CDARS rates are set by your placing bank, so they vary widely. They are often below the best online CDs because:
- The placement network’s cost is built into the rate.
- You are buying one relationship bank’s quote, not shopping each recipient bank.
- Recipient banks take the money at network rates, not their own promotional rates.
The fix is to benchmark every CDARS quote against two dated numbers for the same term:
| Term | Treasury bill (coupon equivalent, Oct 2, 2026) | Best national 1-year CD (Sept 25, 2026) |
|---|---|---|
| 13 weeks (3 months) | 4.11% | 4.35% to 4.50% APY |
| 26 weeks (6 months) | 4.29% | |
| 52 weeks (1 year) | 4.46% |
Sources: U.S. Treasury Daily Treasury Bill Rates, October 2, 2026; DepositAccounts 1-year CD table, updated September 25, 2026. Your CDARS quote is the third column you fill in.
On $1M for 1 year, every 0.25 point below the benchmark costs $2,500. For a depositor who values one statement and one relationship, that can be a fair price. Know the number before you sign.
When CDARS Beats Stacking Yourself
- You have $1M+ to deposit and want operational simplicity. Managing 4-10 separate bank relationships, with separate online logins, separate statements, separate 1099-INT filings, and separate beneficiary designations is real work. CDARS eliminates all of it.
- You don't want to actively rate-shop. CDARS gives you a single rate negotiation with your relationship bank.
- You value the existing bank relationship. Local community banks that participate in CDARS often offer it as a service to retain larger customers who would otherwise need to leave for FDIC reasons.
- You need eventual liquidity planning. CDARS provides one set of maturities to track instead of 5-10.
When CDARS Doesn't Beat Stacking Yourself
- You have under $500K. The fee impact is large relative to the simplicity benefit. Two direct bank CDs are usually a better deal.
- You want the highest possible yield. Direct-bank CDs at the best-rate institutions consistently beat CDARS by 15-40 basis points.
- You're rate-shopping aggressively. Promotional CDs at specific banks (Marcus, Synchrony, Ally during promotional periods) can be 50-100 basis points above CDARS for short periods.
- Your bank doesn't participate in CDARS. Not all banks are members. If you'd have to switch banks to access CDARS, weigh the relationship cost.
Where MYGAs Fit
For depositors with $500K-$5M in fixed-income allocation and a 3-7 year horizon, multi-year guaranteed annuities are the other option: A-rated 5-year MYGAs topped out around 5.80% to 6.00% on September 24, 2026 (AnnuityRateWatch), guaranteed for the term and backed by the claims-paying ability of the issuing insurer. Splitting the allocation across 2-3 carriers stays within state guaranty fund coverage on each carrier slice (similar concept to CDARS bank-slicing, but with insurance carriers). The trade-off: surrender charges, no FDIC insurance, longer commitment, less liquidity. For the slice of large savings already destined for multi-year lock-up, MYGAs are the structural yield winner.
Is CDARS safe? Has anyone lost money?
Each piece is a deposit at an FDIC-insured bank, under the $250,000 limit, titled so that pass-through FDIC coverage applies. IntraFi states that through bank failures no depositor has lost a penny placed using ICS and CDARS. Two gaps to know: money sitting at your own bank before it settles into the network (or after a withdrawal) can be over the limit for a short time, and any CD you already hold directly at a recipient bank counts toward that bank’s $250,000. Exclude those banks when you sign up. See how FDIC coverage works for CDs.
CDARS vs ICS vs brokered CDs
| CDARS | ICS | Brokered CDs | |
|---|---|---|---|
| Product | CDs, 4 weeks to 3 years | Demand and money market deposit accounts | CDs bought in a brokerage account |
| Liquidity | Until maturity (early withdrawal penalty) | Daily for demand deposits; money market deposit accounts may limit withdrawals | Sell on the secondary market at a price that can be below what you paid |
| FDIC coverage above $250,000 | Yes, across network banks | Yes, across network banks | Yes, if you buy from different banks yourself |
| Who sets the rate | Your bank | Your bank | Each issuing bank, shown in your brokerage |
Details: the ICS program and brokered CDs vs bank CDs.
From my desk: when I see CDARS make sense
I work with retirees and sellers who suddenly hold more cash than FDIC covers, often after a home or business sale. As a licensed insurance producer I am not paid on CDs, so I look at CDARS as a neutral comparison. It makes sense when the money will be needed within a year or two and the client wants one bank. The mistake I see is accepting the first quote without a benchmark.
Example (Treasury data, October 2, 2026): $1,000,000 for 26 weeks. A 26-week T-bill paid 4.29% coupon equivalent, and Treasury interest is exempt from state income tax. For a California resident in the 9.3% bracket, that exemption is worth about $3,990 a year on $1M at 4.29%. A CDARS CD is fully state-taxable, so it has to beat the T-bill by that much to come out even. Read more on state tax on Treasury interest and other ways to insure more than $250,000.
Frequently Asked Questions
Related Reading
- ICS network explained
- FDIC insurance explained
- Stacking FDIC coverage
- Finding CD rates over 5%
- MYGA rates (alternative for large savers)
Get a second opinion on your CD or large-deposit strategy
Talk to a licensed independent expert before you commit to a multi-year CD or place a large deposit.
If you're stacking FDIC categories, choosing a brokered CD desk, or weighing MYGAs against CDs for your fixed-income bucket, a 15-minute independent review confirms (or improves) your plan.
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Hans Goldstein · 213-414-2808 · NPN 20602398, independent licensed insurance producer appointed with multiple A-rated carriers
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Disclosure
This article reflects publicly available information and approximate rates as of the date stated above. CD rates, brokered CD inventories, FDIC and NCUA rules, and carrier MYGA rates change frequently, often daily. Always verify current values against the issuing institution's official disclosure documents before committing funds. This is general education, not a personal recommendation or an offer of any product. Hans Goldstein is an independent licensed insurance producer (NPN 20602398) appointed with multiple A-rated carriers across the annuity market; this article is not an endorsement of any specific bank, brokerage, credit union, or carrier. No compensation has been received from any reviewed institution in connection with the publication of this article. FDIC and NCUA insurance limits, ownership category rules, and the operations of CDARS, ICS, and other IntraFi programs are governed by federal regulation and the program documents; always confirm coverage with the institution and refer to FDIC.gov, NCUA.gov, or IntraFi.com for the official rules. MYGA carrier financial strength ratings, state guaranty fund limits, and tax treatment are subject to change. Always read the actual contract and consult a licensed advisor before purchasing any annuity, CD, or insurance product.