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Multiply Your Deposit Protection and Supercharge Your Savings with CDARS and ICS

Nov 30, 2023 Personal , Small Business
couple sitting at laptop on couch enrolling for ICS

In the world of finance, it’s always crucial to manage risk while maximizing returns. As a customer of BankSouth, you have access to innovative solutions that allow you to achieve both these objectives. Two such solutions are the Insured Cash Sweep (ICS) and Certificate of Deposit Account Registry Service (CDARS). These services can significantly multiply your deposit protection while supercharging your savings.

Understanding ICS

The Insured Cash Sweep service, or ICS, is a smart, secure, and convenient way to safeguard large deposits while maintaining access to funds and earning interest. With ICS, your funds are placed into deposit accounts at multiple FDIC-insured banks. This allows you to access increased FDIC insurance beyond the standard $250,000 limit. By using the ICS service, you can keep your money working for you in a manner consistent with your investment goals. You also have the option of choosing between a demand deposit account (offering complete liquidity) and a money market deposit account (offering better returns).

Explaining the Concept of CDARS

The Certificate of Deposit Account Registry Service, or CDARS, is another innovative tool for maximizing FDIC insurance on your deposits. With CDARS, your large deposit is broken down into smaller amounts and placed into CDs at multiple banks. This allows you to earn CD-level returns while keeping your investment fully insured. CDARS is an excellent solution for individuals, businesses, nonprofit organizations, public funds, and other entities looking to preserve capital and earn a return. It offers a one-stop solution for accessing multi-million-dollar FDIC insurance on CD investments.

Comparing CDARS and ICS with Traditional Savings Accounts

man using calculator to figure out return on CDARS compared to regular savingsDespite the numerous advantages of CDARS and ICS, some individuals still prefer to keep their money in a traditional savings account. There are a few reasons for this. First, savings accounts are straightforward and simple to understand. They offer a safe place to store money while earning some interest. Secondly, savings accounts are easily accessible. Most banks allow unlimited deposits and up to six withdrawals per month without any penalties.

Despite these benefits, there are several reasons why leaving all your money in a savings account may not be the best option. The most significant factor is the relatively low interest rates offered by these accounts. While it’s true that your money is earning interest in a savings account, the rate is often so low that it barely keeps up with inflation. This means that over time, the real value of your money could actually decrease.

Additionally, the FDIC insurance limit for savings accounts is $250,000. If you have more than this amount in your one account, the excess is not insured. This can create uncertainty in those funds over and above the insured limit.

On the other hand, CDARS and ICS offer the possibility of higher returns and greater FDIC insurance coverage. By spreading your deposits across different banks within the network, you can insure much larger amounts. In addition, CDARS offers fixed returns, which can provide a more stable income stream compared to the variable interest rates of savings accounts.

While savings accounts may seem like the easy option, they may not offer the best return or protection for your money. Considering alternatives like CDARS and ICS could lead to better financial outcomes.

How ICS and CDARS Positively Impact Businesses and Personal Financial Management

By leveraging ICS and CDARS, you can enjoy peace of mind knowing your deposits are protected. Here’s how these services can help you and your business:

  1. Enjoy Increased Protection: With ICS and CDARS, you can access FDIC insurance coverage from many banks while working directly with just one: BankSouth. This means you can protect deposits larger than the standard FDIC insurance limit of $250,000.
  2. Earn Competitive Returns: Your money isn’t just safe—it’s also working for you. You can earn interest on funds placed through ICS or CD-level returns with CDARS.
  3. Experience Convenience: With these services, you work directly with us—a bank you know and trust. You receive one regular statement detailing your holdings, and you have one agreement to manage. This is especially beneficial to businesses because it helps to reduce administrative burdens.
  4. Access Funds: With ICS, you can choose to place funds into demand deposit accounts or money market deposit accounts, depending on your liquidity needs.
  5. Save Time: By using ICS and CDARS, you can significantly reduce the time spent managing multiple banking relationships.

In conclusion, ICS and CDARS are excellent tools to supercharge your personal or business savings and multiply your deposit protection. They offer a unique combination of safety, return, and convenience.

At BankSouth, we are committed to providing our clients with innovative solutions to manage their finances. Contact us today to learn more about how ICS and CDARS can help you achieve your financial goals.

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