Comments on: How to Have $50 Million Covered By FDIC: CDARS

By: G

Sat, 30 Jan 2010 05:17:04 +0000

I believe 20,000,000 invested in cdars at 5% is actually fully matured annually. Although month to month is an option it is only a fraction of 5%. so in 30 days it would be 20 mil • 5%/12. your balance at months end would be closer to 20,083,333.33 so about $83,333 interest on 20 mil.

By: Richard

Richard — Fri, 18 Sep 2009 18:40:50 +0000

Maybe I am missing something here, but I still don’t get it. If I invest $20 million in a CDARS account in 30 day CD’S, it seems at the end of the 30 days, when these mature, I am still only going to have $20 million. Please explain .

By: Flexo

Flexo — Thu, 17 Sep 2009 23:41:18 +0000

You earn interest the same way you earn on any certificate of deposit. You choose your maturity and earn the interest rate assigned. The bank(s) pay you the interest. Maybe you’re misunderstanding the statement — if the FDIC maximum for coverage is $250,000, CDARS invests only say $230,000 with each bank so when the bank pays interest into the account, it doesn’t put you over the maximum ($250,000).

By: Richard

Richard — Thu, 17 Sep 2009 23:35:52 +0000

I do not understand how you make money on these CD’s if (from the article) ” The amount invested with each bank will be less than the FDIC maximum to allow for the interest you earn to be within the coverage limits as well”. I think it is great if you do have a large sum of cash you want protected, but how do you earn from these investments?

By: Flexo

Flexo — Fri, 11 Sep 2009 03:49:36 +0000

Glad I was able to help, Stacey!

By: Flexo

Flexo — Wed, 09 Sep 2009 15:57:29 +0000

FDIC has a massive credit line, they’re increasing required fees paid by banks, and the government will print money if they have to. FDIC is in verry little danger of not being able to cover bank failures even in the worst of conditions.

By: David@DINKS Finance

David@DINKS Finance — Wed, 09 Sep 2009 15:37:03 +0000

You forget one thing – this all hits the fan if the FDIC runs out of cash (which is looking at least probable). FDIC is a good thing to have, but only if we can afford it, which isn’t looking likely with the current state of our economy.

By: Stacey

Stacey — Wed, 09 Sep 2009 13:36:47 +0000

This is great Flexo! My boyfriend is about to inherit a bunch of cash and we were just discussing the situation with FDIC limits and how he’d need to open a bunch of accounts at different banks. Very timely…thanks so much.