- How are larger deposits insured by the FDIC?
- How does it work?
- Who is the third party provider through which VCB and other network members offer CDARS and ICS programs?
- What terms are available for CDs opened through the CDARS program and MMDAs opened through the ICS program?
- If the CDs and MMDAs are opened at other banks, how do I know what rates they offer?
- Is there a minimum or maximum amount of money that I can invest through the CDARS or ICS program?
- Will I have to complete paperwork with every bank that holds a CDARS CD or ICS MMDA for me?
- Will I receive information from each of the banks where my CDARS CDs or ICS MMDAs are placed?
- How many banks are participating in the CDARS and ICS programs?
- Do the CDs opened through the CDARS program renew automatically at the end of the CD term?
- Can I get access to funds that I have invested in CDARS CDs prior to the end of the CD term?
- How often can I access the funds in my ICS account?
- Can I use the CDARS and ICS programs for both my personal and my business investments?
- What if a bank fails where I have an account though the CDARS or ICS program?
- How long does it take for the Federal Deposit Insurance Corporation (FDIC) to pay depositors for their insured accounts if a bank fails? I’ve heard the FDIC can take up to 99 years to pay depositors for their insured accounts.
- How can I secure my large deposits through CDARS and ICS today?
1. How are larger deposits insured by the FDIC?
The basic limit on federal deposit insurance coverage is at least $250,000 per depositor. So, you could run around to various institutions to deposit your funds to receive full FDIC coverage, or you can place your large-dollar deposit into one CDARS, or ICS (Insured Cash Sweep) account at Virginia Commerce Bank. These accounts provide access to multi-million dollar FDIC insurance coverage.
- You make deposits through Virginia Commerce Bank and benefit from our consistently high deposit rates. Choose either CDARS, which is a CD with various terms, or ICS, which is a money market account (MMDA) with no fixed term and the flexibility to access your funds at any time.
- Your funds are then divided into increments of less than $250,000 to ensure that both principal and interest are eligible for full FDIC insurance.
- Then we arrange for the placement of your funds with other banks in the program network, while those banks place deposits of the same amount into Virginia Commerce Bank.
3. Who is the third party provider through which VCB and other network members offer CDARS and ICS programs?
Promontory Interfinancial Network, a company sanctioned by the FDIC makes these programs available to banks around the country.
4. What terms are available for CDs opened through the CDARS program and MMDAs opened through the ICS program?
Terms for CDARS include 4, 13, 26 or 52 weeks (1 year), 104 weeks (2 years), and 156 weeks (5 years). ICS is a money market account and there is no term. Enjoy the flexibility of making additional deposits to your account or a limited number of withdrawals each month.
5. If the CDs and MMDAs are opened at other banks, how do I know what rates they offer?
While the CDs and MMDAs are opened at other member banks participating in the CDARS and/or ICS program, you only need to work with VCB for one rate for the full amount you invest in either program.
6. Is there a minimum or maximum amount of money that I can invest through the CDARS or ICS program?
Accounts may be opened in any amount over $100,000. Limits apply for certain CDARS terms. Be sure to ask for details.
7. Will I have to complete paperwork with every bank that holds a CDARS CD or ICS MMDA for me?
No. It’s very easy. All you’ll need to do is complete and sign a few VCB forms that include a Deposit Placement and Custodial Agreement and we will take care of everything else.
8. Will I receive information from each of the banks where my CDARS CDs or ICS MMDAs are placed?
We will make this easy and convenient for you, and send you one consolidated statement and a 1099 tax form that includes a list of all the banks in which your funds have been placed.
9. How many banks are participating in the CDARS and ICS programs?
Currently there are more than 3,000 banks across the United States participating in the CDARS and ICS programs.
10. Do the CDs opened through the CDARS program renew automatically at the end of the CD term?
No, not automatically. Approximately 15 days before the end of the CD term, you will receive a notice to let you know that your CDs are about to mature. You will have the option to request that VCB reinvest the money into the CDARS program again or to have the proceeds from these CDs paid to you. Reinvestment through the CDARS program requires instruction from you to resubmit the money for deposit.
11. Can I get access to funds that I have invested in CDARS CDs prior to the end of the CD term?
While this is possible, it is highly discouraged and significant early withdrawal penalties apply. Monies should not be invested in CDARS CDs that may be needed prior to the conclusion of the CD term. Subject to credit approval, you may use CDARS deposits as collateral for a loan.
12. How often can I access the funds in my ICS account?
Since this type of an account is a money market, you have the flexibility to access funds in your account at any time. However, just like the traditional money market accounts, there are limits to the number of withdrawals that can be made – only six each month. This account provides online access to your balances and will keep track of the number of withdrawals that are made each month. To access your ICS account online, be sure to log into www.depositorcontrol.com using the access information provided at the time of account opening.
13. Can I use the CDARS and ICS programs for both my personal and my business investments?
Yes. Individual savers and investors along with businesses of any size may use this service. It provides an easy and convenient way for anyone, including personal investors, business owners, non-profit organizations and trustees, to ensure that large deposits have the benefit of full FDIC insurance coverage.
14. What if a bank fails where I have an account through the CDARS or ICS program?
All banks in both the CDARS and ICS networks are FDIC insured. Therefore, if something happens to one of the financial institutions, you will receive the full balance of your funds.
15. How long does it take for the Federal Deposit Insurance Corporation (FDIC) to pay depositors for their insured accounts if a bank fails? I’ve heard the FDIC can take up to 99 years to pay depositors for their insured accounts.
Historically, the FDIC pays insured deposits within a few days after the bank closes, usually by the next business day. In most cases the FDIC will provide each depositor with a new account at another insured bank. Or, if arrangements cannot be made with another institution, the FDIC will issue a check to the depositor.
It is a complicated false notion that the FDIC can take up to 99 years to pay depositors for their insured account. This is a myth that many bank customers have heard from someone attempting to sell them another type of financial product. In fact, by Federal law the FDIC is required to pay insured deposits “as soon as possible” once an insured bank fails, typically within a few days.
16. How can I secure my large deposits through CDARS and ICS today?
Call (877) VCB-5015 or use our locator to find the branch most convenient for you and to experience our outstanding customer service.
CDARS CD and ICS Money Market accounts require a VCB checking account. Minimum opening deposit for both is $100,000. CDARS CDs have a penalty for early withdrawal and ICS Money Market program withdrawals are limited to six per month; both are available for personal, business or public funds. Limits apply. Funds may be submitted for placement only after a depositor has signed a Deposit Placement Agreement with VCB. The agreement contains important information and conditions regarding the placement of funds through CDARS and ICS. CDARS, Certificate of Deposit Account Registry Service, ICS and Insured Cash Sweep are registered service marks of Promontory Interfinancial Network, LLC. Available to entities eligible to maintain interest bearing accounts and all individuals. Ask for complete details.
