Best Savings Account for Large Sums of Money – No FDIC Insurance Limit

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I was researching the best savings account for large sums of money recently and came across a neat way to save a good amount of cash and still benefit from a Federal insurance program such as the FDIC insurance coverage.  This alternative appears to be the best savings account for high net worth individuals, one that does not have a cap on the FDIC insurance limit.

I don’t have personal experience with this method of saving yet, but I’d like to share what I have learned from researching this topic over the last couple weeks.

In the USA, Federal Deposit Insurance Corporation (FDIC) insurance coverage is the Government’s promise to insure your savings deposits in financial institutions.

Many countries have similar arrangements, such as that of the Reserve Bank of India (RBI) over deposits in Indian banks.

During the global economic crisis of 2008, the Federal Government of the United States increased its FDIC coverage from $100,000 to up to $250,000 (which may change in the future).

While this limit is sufficient to cover the majority of savers, there are some savers who have a lot more money who are looking for a safe haven.  So where can these savers put their money while resting assured their monies are safe?

CDARS, the Certificate of Deposit Account Registry Service, is a program that “provides a convenient way for safety conscious investors to access FDIC insurance on multi-million dollar deposits”. Intriguing.

Not everyone has the appetite to invest in non risk free investments.  Not everyone wants all their money to be exposed to risk in the stock market. The CDARS initiative appears perfect for these types of individuals.

Whereas many financial planners will tell you to establish multiple accounts in multiple banks to spread risk and maximize FDIC coverage, this approach can be laborious and leave you with multiple accounts to maintain, relationships to manage, interest rates to contemplate and maturity dates to dance around.

CDARS doesn’t sound so bad if you want to avoid all those headaches.  CDARS is a program put together by ex top banking executives, and has over 3,000 participating banks and financial institutions.  When you keep your money with a CDARS participating bank, your monies are distributed across member banks so that no one bank has more than a certain percentage of your money.

This program was initially meant for Governments, Non Profits, Corporations and other entities interested in capital preservation.  In recent years, this option has opened up to individuals as well, so long as you have over $100,000 to deposit. On the surface at least, this appears to be the best savings account for large sums of money so far.

When you save your money as part of the CDARS program, you have one bank to deal with (the one where you open your account). In addition, you have one interest rate and one maturity date to manage.  I have not used the service myself yet, but from preliminary discussions with their corporate representatives, I have learned out that interest rates are higher than market rates, but certainly not as high as some risk free saving mechanisms overseas.

For someone looking to keep their monies state side however, I am starting to wonder whether a vehicle like CDARS is the best savings account alternative?

Have you heard of CDARS? Do you have any personal experience / exposure to how it works?  Would you ever consider something like CDARS?  How do you obtain maximum insurance protection over your deposits in banks?

I have no personal experience saving with CDARS. I recommend conducting your own due diligence prior to considering their services.

11 Responses to “Best Savings Account for Large Sums of Money – No FDIC Insurance Limit”

1. Yash says:

   November 27, 2012 at 2:28 pm

   I read your article on saving accounts and realize that you provide an awesome information and i appraised your blog article content.
   I want to say thanks to admin for sharing this.

   Reply
   • Sunil says:

     November 27, 2012 at 4:58 pm

     thanks Yash. welcome to the blog

     Reply
2. Hydrangea says:

   November 28, 2012 at 2:10 am

   Nice article and thank your valuable information and I wish you luck

   Reply
3. Vfd drive says:

   December 10, 2012 at 11:10 am

   Well nice collective information you gathered here to educate your reader about Saving accounts. I found it very helpful.
   thanks

   Reply
   • Sunil says:

     December 15, 2012 at 9:31 am

     welcome to the blog

     Reply
4. Prasenjit says:

   January 28, 2013 at 11:11 pm

   very informative article….I am expecting similar types of articles more in future….please share with us….

   Reply
   • Sunil says:

     January 29, 2013 at 8:47 am

     glad you enjoyed Prasenjit – what in particular did you like about it most?

     Reply
5. JM Stroud says:

   March 30, 2013 at 5:36 pm

   As we are watching now with the Cyprus money debacle, sometimes having your money where you know it is safe in the US is a good idea. While I am not saying other countries are unsafe money havens, I am saying be careful.

   When in doubt just deposit up to the FDIC limit at each bank.

   Reply
   • Sunil says:

     April 2, 2013 at 10:07 am

     agree – and spread across multiple reputable institutions as you accumulate wealth

     Reply
6. Saving says:

   May 12, 2015 at 8:53 am

   Agree with you but we can also invest in long time mutual funds for better retruns

   Reply
7. Emma says:

   September 20, 2015 at 4:59 am

   What a great article ! I have never seen such a beautifully written article before.

   Reply