Chris Rowe

Another Reason to Trade Options

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MAKE SURE YOUR MONEY TREE IS MADE OF CDARS

First I'll explain how CDARS accounts are FDIC-insured up to $50 million.

The Certificate of Deposit Account Registry Service, operated by the Promontory Interfinancial Network, takes your deposits and spreads the risk around numerous banks. In other words, if you had $1 million and you know the FDIC insures up to $100,000, you might consider opening 10 savings accounts at 10 separate banks. But CDARS does that legwork for you.

Your deposits get broken down into packets below $100,000 (below, so the interest you earn doesn't put you over the hundred-grand limit), and then distributed between several banks around the country.

But you don't have to open any additional accounts, and you still get one bank statement, one interest rate and one 1099, all from your home bank. Again, there's no extra charge to you, the customer, but there is a charge to the bank.

Just like your typical CD (certificate of deposit), there are a variety of maturities. You can select from maturities ranging from four weeks to five years.

So anyone with more than $100,000 in the bank should ask their bank if they are a member of the Promontory Interfinancial Network. Better than 2,200 banks are members so it's likely that your bank is on that list.

What if your bank isn't a member? What if you don't want to use CDARS or you don't need that much protection? Maybe you're slightly over the $100,000 limit the FDIC offers?

DIFFERENT IS GOOD

I noticed on the CDARS Web site it says "ALMOST anyone can benefit from CDARS." So just in case you aren't one of "almost everyone," you can finagle your account structures into different "account categories."

Here are a few facts that you should understand to help you max out your FDIC insurance.