The Certificate of Deposit Account Registry Service

The Certificate of Deposit Account Registry Service lets you get FDIC insurance for more than $100,000 in deposits by dividing the money into separate CD's of $100,000 that are all insured.

This may be the best savings account option for bank customers who were tired of having to deal with multiple banks so that all of their deposits would be insured.

From Minyanville.com

Here’s how CDARS works:

* You make deposits through a single member bank.

* Your funds are divided into CDs of less than $100,000 each to ensure that principal and interest receive full FDIC insurance coverage.

* The CDs are issued to member banks in the Promontory Interfinancial Network.

* When funds are sent out of one bank, an equal amount is sent to the originating bank from other members of the network. This keeps the entire amount of the deposit in the community of origin while assuring full FDIC coverage.

* A bank making CDARS transactions can select its own interest rate and therefore doesn’t have to pay an artificially high national brokered rate to attract new funds.

* The smart customer therefore shops around for the best rate.

* The customer deals with one bank, receives one monthly statement and earns a single interest rate.


In general, local or regional banks offer the CDARS program while major banks such as JP Morgan Chase (JPM), Wells Fargo (WFC) and Wachovia (WB) do not. The CDARS program is available through 1,650 banks in all 50 states and the District of Columbia – think Apple Bank for Savings, Security First Bank of North Dakota or Alaska First Bank & Trust.

The American Bankers Association has endorsed the product, saying “CDARS allows banks to offer customers security as well as the convenience of one-stop shopping. It’s good for banks, depositors and the economy.”

Recent 3 Year CD Rates From Major Institutions

From BankRate.com

Institution - Date - Rate - APY*- Minimum Deposit

E-LOAN - 7/23 - 5.32 - 5.46 - 10000


Discover Bank - 7/23 - 5.17 - 5.30 - 2500

Third Federal
Savings and Loan - 7/23- 4.92 - 5.00 - 0

MetLife Bank, NA - 7/20 - 5.21 - 5.35 - 25000

*Annual Percentage Yield

Searching for Yield - Best Savings Account News

From 17KGET.com

Q: How do I go about finding the best CD rates? -- C.M., by e-mail

A: The two major Web sites that provide yield information are www.bankrate.com and www.banxquote.com. In early July, Banxquote was showing that the best yield on a one-year bank CD was 5.50 percent, while the national average was only 3.73 percent.

The difference is a big incentive to do some real comparison shopping when looking for yield investments. When you drill down to look for yields on bankrate.com, for instance, you'll find that the Internet-based banks tend to offer the high yields, while the big brick-and-mortar banks are offering yields that can be half, or less.

You should also compare CD yields with yields on comparable Treasury obligations and U.S. Savings Bonds. The Bloomberg Web site, www.bloomberg.com, shows that a six-month Treasury bill was priced to yield 5 percent. That's well over the national average yield on bank CDs.

You can learn about Savings Bond yields (and Treasury obligations) at www.savingsbonds.gov. Currently, EE Savings Bonds are yielding 3.40 percent. Purchase is easy, can be done in small amounts and interest is tax-deferred -- but the 3.4 percent yield won't induce many people to move cash out of their money market mutual funds.

Fidelity Government Money Market Fund (ticker: SPAXX) recently had an effective seven-day yield of 5.08 percent, while Fidelity U.S. Government Reserves (ticker: FDLXX) was yielding 5.14 percent. Its most conservative money market fund, Fidelity U.S. Treasury Money Market Fund (ticker: FDLXX), was yielding 4.61 percent.

If you are interested in another route to tax-deferral, try www.annuityadvantage.com. It provides yield information on single premium-deferred annuities, including those structured like CDs.