CDARS for Socially Responsible Investors

CDARS for Socially Responsible Investors

Wouldn’t it be nice to secure your money and to help underserved communities at the same time? Whether you are an individual investor or whether you work for an organization with socially responsible investment goals, you can use CDARS® to access multi-million-dollar FDIC insurance, earn CD-level interest, and help make entire communities economically stronger and healthier.

Depositing funds through CDARS is safe and easy. When you deposit funds through CDARS, you can work directly with just one bank, sign one Deposit Placement Agreement, earn one rate for each CD maturity, and receive one easy-to-read statement summarizing all your CD holdings. It’s that simple.

See how one local bank is making a difference in its community.

Banking on Communities Initiative

Banking on Communities Initiative

The Banking on Communities initiative is a joint effort by Promontory Interfinancial Network and the Community Development Bankers Association (CDBA) to help CDBA member banks raise funds that can be used to increase lending in underserved communities. The CDBA is a national trade association of the community development banking industry and was established to help its members better meet the credit needs of their communities. Because of their size (small), age (young), and location (underserved communities), CDBA members often find their funding options limited and have fewer resources to devote to attracting deposits. The CDARS® service, provided by Promontory Interfinancial Network and offered by banks to their customers, has helped CDBA banks to raise billions of dollars in deposits since the launch of this initiative in 2004.


“By utilizing the CDARS and Insured Cash Sweep services, CDBA member banks have successfully gathered deposits to help underserved communities. These services help the banks to offer their customers access to multi-million-dollar FDIC insurance, which raises customer comfort levels in a way that leads to more deposits for banks in distressed areas – which, in turn, can increase funding available for lending initiatives in economically challenged cities and towns.”

- Jeannine Jacokes
Chief Executive and Senior Policy Advisor
Community Development Bankers Association


How CDARS Can Help

When you work with a participating CDBA bank to place funds through CDARS, the full amount of your deposit is eligible for FDIC insurance – even amounts exceeding the standard FDIC insurance maximum of $250,000 (though limits do apply) – and can be made available for lending initiatives in economically distressed communities. These initiatives can include producing affordable housing, financing small businesses, creating jobs, and expanding neighborhood facilities that provide much-needed services for low-income families.

You Can Benefit Too

Earn a Return
Earn interest on CDs.

Enjoy Peace of Mind
Rest assured knowing that your funds are eligible for multi-million-dollar FDIC insurance – protection that is backed by the full faith and credit of the federal government. No one has ever lost a penny of FDIC-insured deposits.

Feel Good About the Difference You Are Making
Know that the full amount of your funds placed through CDARS can support lending opportunities that create a brighter future for others.1

How CDARS Works

How CDARS ICS Works People 700Px No Text

  • All CDBA banks are Community Development Financial Institutions (CDFIs). When you deposit funds into the CDARS service through a participating CDFI, everything is handled through that CDFI.
  • That CDFI uses CDARS to place funds into CDs issued by other banks that offer CDARS. This occurs in increments <$250,000 so that both principal and interest are eligible for FDIC insurance.
  • By working directly with just one institution, you can access coverage from many. You receive just one regular statement, and your confidential information remains protected.

5 Easy Steps to Get Started

1 Sign a CDARS Deposit Placement Agreement and deposit funds. 2

2 Your funds are placed using the CDARS service.

3 Your CDs are issued by banks in the CDARS Network.

4 Receive confirmation from your bank of your CDs.

5 Receive consolidated interest payments and one monthly statement.

Learn More

Click here to see a list of CDFI/CDBA Member Banks that offers CDARS.


1 When deposited funds are exchanged on a dollar-for-dollar basis with other banks in the CDARS Network, a participating institution can use the full amount of a deposit placed through CDARS for local lending, satisfying some depositors’ local investment goals or mandates. Alternatively, with a depositor’s consent to certain types of CDARS transactions, the bank may choose to receive fee income instead of deposits from other banks. Under these circumstances, deposited funds would not be available for local lending.

2If you are subject to restrictions with respect to the placement of funds in depository institutions, it is your responsibility to determine whether the placement of funds through CDARS satisfies those restrictions.

Gulf Coast Rebuilding Challenge

Gulf Coast Rebuilding Challenge

Promontory Interfinancial Network is proud to have supported initiatives like the $1 Billion Gulf Coast Rebuilding Challenge, which encouraged participants to deposit money into community banks in the Gulf region in the wake of Hurricane Katrina. These community banks then used the deposits to address immediate lending needs, as well as longer-term projects in their local footprints.

Many corporations, such as General Motors, Home Depot, Bank of America, and Microsoft, as well as other participating depositors, answered the challenge by placing funds through CDARS. CDARS enabled socially motivated investors to channel much-needed deposits to communities while still earning CD returns and knowing their funds were eligible for FDIC insurance backed by the full faith and credit of the federal government. The project channeled capital into the Gulf Region and created a highly flexible source of liquidity for rebuilding the Gulf Coast. Who knew that simply depositing funds into fully FDIC-insured, interest-bearing CDs could make such a difference?!

[1] If you are subject to restrictions with respect to the placement of funds in depository institutions, it is your responsibility to determine whether the placement of funds through CDARS, or a particular CDARS transaction, satisfies those restrictions. Limits apply. Funds may be submitted for placement only after you enter into a CDARS Deposit Placement Agreement with a participating institution. The agreement contains important information and conditions regarding the placement of funds.

[2] All CDBA members are CDFIs – a special designation by the U.S. Department of Treasury to recognize they primarily service economically distressed communities or populations.

Why CDARS?

Why CDARS?

When you place deposits through CDARS, you enjoy the benefits of One Bank, One Rate, One Statement®

One Bank. Access multi-million-dollar FDIC insurance coverage by working directly with just one bank – a bank you know and trust – and avoid the burden of tracking changing collateral values on an ongoing basis if you are accustomed to doing so.

One Rate. Earn one rate for each CD maturity and enjoy the option of reinvesting through a simple process. Historically, rates on CDs placed through CDARS have compared favorably to Treasuries.

One Statement. Receive one easy-to-read statement summarizing all of your CDARS holdings.

In addition, the full amount of your deposit placed through CDARS can support lending opportunities in a local community. You have the ability to make significant contributions to the banks serving communities in need and the satisfaction associated with making a difference.3

How Does CDARS Work?

When you deposit funds through a local bank that is a CDARS Network member, those funds are divided into smaller amounts and placed with other CDARS Network members. Then, those banks issue CDs in amounts below the standard FDIC insurance maximum ($250,000) so that both principal and interest are eligible for FDIC insurance.

Other Network members do the same thing with their customers’ funds, and a sophisticated matching system enables Network members to exchange funds with each other on a dollar-for-dollar basis. The resulting reciprocal transactions bring the full amount of the original deposit back to your bank, which can make the full amount of your invested funds available for lending in the local community.3

What Else Should I Know?

Your account information is protected; your banking relationship remains between you and your bank – the bank you know and trust.

[1] If you are subject to restrictions with respect to the placement of funds in depository institutions, it is your responsibility to determine whether the placement of funds through CDARS, or a particular CDARS transaction, satisfies those restrictions. Limits apply. Funds may be submitted for placement only after you enter into a CDARS Deposit Placement Agreement with a participating institution. The agreement contains important information and conditions regarding the placement of funds. CDARS and One Bank, One Rate, One Statement are registered service marks, and Reciprocal is a service mark, of Promontory Interfinancial Network, LLC.

[2] All CDBA members are CDFIs – a special designation by the U.S. Department of Treasury to recognize they primarily service economically distressed communities or populations.

[3] When deposited funds are exchanged on a dollar-for-dollar basis with other banks in the Network, the relationship institution can use the full amount of a deposit placed through CDARS for local lending, satisfying some depositors’ local investment goals or mandates. Alternatively, with a depositor's consent, the relationship institution may choose to receive fee income instead of deposits from other participating institutions. Under these circumstances, deposited funds would not be available for local lending.

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