Managing large-sum accounts can carry unique challenges, especially as it relates to  keeping funds insured and easy to manage. The Federal Deposit Insurance Corporation (FDIC) provides protection for up to $250,000 per depositor, per insured bank. Once your balance goes beyond that amount, however, you’ll need another way to protect your money.

Some people open accounts at multiple banks to extend coverage, but that can get complicated fast. Multiple logins, renewal dates and statements can make it difficult to keep things organized. Fortunately, there’s a simpler way to protect large sums without sacrificing convenience or control.

Certificate of Deposit Account Registry Service®, or CDARS® (pronounced “cedars”) services allow you to work directly with one bank while receiving FDIC insurance well beyond standard limits. Read on to learn the details surrounding CDARS in banking, who can benefit from a CDARS account and factors to consider when choosing a participating bank.

What is CDARS, and How Does it Work?

CDARS is a nationwide network of financial institutions that allows customers to access expanded FDIC insurance coverage of up to $50 million through a single banking relationship. It’s managed by Promontory Interfinancial Network, a fintech (financial technology) provider that partners with thousands of member banks across the United States.

Each participating CDARS member bank sets its own certificate of deposit (CD) rate, and that rate applies to the total amount you deposit. Your chosen financial institution serves as the custodian of your CDARS deposit, while The Bank of New York Mellon (BNY Mellon) acts as the subcustodian by overseeing all underlying transactions. BNY Mellon is one of the largest and most trusted custodial banks in the world. Here’s a simple breakdown of CDARS in banking.

1. When you open a CDARS account, you make one large deposit through a participating bank.

2. Behind the scenes, the network divides your deposited amount into smaller certificates of deposit (CDs), each under the $250,000 FDIC insurance limit.

3. Those smaller CDs are placed with other CDARS member banks across the country, but your relationship remains with your home bank. You receive one interest rate, one statement and full FDIC insurance coverage for your eligible balances.

4. Through a dollar-for-dollar exchange process, your local bank still receives the full value of your deposit to help fund loans and business growth in your community.

Who Benefits Most From CDARS?

For anyone managing significant balances, CDARS combines peace of mind with simplicity. You can enjoy expanded insurance and a consistent rate, all provided through the community bank you already know and trust. Common uses for CDARS accounts include the following.

• Businesses and corporations that need to safeguard large operating or reserve balances

• Municipalities and public entities that must maintain insured deposits under state or local requirements

• Nonprofit organizations and foundations that hold sizable endowments, grants or donation funds

• Individuals with higher-than-average savings who prefer security and predictable returns

How CDARS Accounts Differ from Traditional Approaches to Saving

Traditional certificates of deposit (CDs) and money market accounts both provide safe, insured savings. The difference lies in scale and structure. With a standard CD, your FDIC protection caps at $250,000 per depositor, per bank. With CDARS, that limit expands dramatically by spreading your deposits across multiple institutions without requiring you to manage multiple accounts. CDARS in banking offers a range of benefits.

• Simplified Management: One relationship, one statement, one interest rate

• Expanded Coverage: FDIC insurance on up to $50 million in deposits

• Consistent Returns: A single rate applies to your entire CD portfolio for predictable earnings

• Local Impact: Your funds continue supporting loans and economic activity in your community

• Added Confidence: Oversight from BNY Mellon ensures custodial safety

When CDARS Might Not Be the Best Fit

While CDARS offers valuable benefits, it’s not ideal for every situation. Because CDARS deposits are certificates of deposit, funds remain locked for the CD term. If you anticipate needing quick access to your money, or if you’re looking for a more flexible savings product, a money market or high-yield savings account might better suit your needs.

It’s also important to note that CDARS is best for those with balances above standard FDIC limits. If your deposits typically fall below $250,000, you may not need the additional coverage a CDARS account provides.

Selecting the Right Bank for Your CDARS Account

CDARS is only available through member banks, but the experience can vary depending on the financial institution you choose. The right bank will do more than simply offer the service — it will act as a trusted partner in protecting and managing your funds. Look for a CDARS partner bank that will:

• Take Time to Understand Your Financial Goals: Your banker should help you determine whether a CDARS account fits your long-term needs and liquidity preferences.

• Prioritize Security: Large-balance accounts can attract unwanted attention. Quality systems designed to spot and stop fraud attempts are essential. Choose a bank that invests in modern cybersecurity tools and employs a dedicated team to help keep your accounts and data better protected.

• Provides Personal Service: Even though CDARS connects you to a national network, your relationship should still feel local and accessible.

• Value Transparency: You should always know your rate, term and coverage details before you invest.

• Support the Community: Deposits made through CDARS help fuel lending in your local market, so choosing a community bank can multiply your impact.

At Central Bank, we believe strong relationships are at the heart of smart banking. As Houston’s longest-serving independent bank, we’ve spent more than 65 years helping individuals and businesses protect what matters most.

Our team takes the time to understand your goals, explain your options and recommend solutions that make sense for your life or business. Whether you’re managing company reserves, safeguarding nonprofit funds or setting aside personal savings, Central Bank is here to help you make informed decisions and move forward with confidence.

If you’d like to learn more about CDARS or explore whether it’s the right fit for your financial goals, get in touch with our team. With big-city financial tools and resources and small-town service, we’re here to help with banking centered around you.