http://www.cdars.com/

http://www.bankrate.com/finance/savings/6-ways-to-insure-excess-deposits.aspx

Certificate of Deposit Account Registry Service (CDARS)

If you like the safety and convenience of CDs and you’re nearing the FDIC limit, you may want to consider the CDARS program if your bank offers it.

Funds above $250,000 are deposited in CDs at other banks in the network. The system is supposed to ensure the money is divided among non-related banks, but you should check to be certain. If you’re wealthy enough, you can insure up to $50 million.

The demand for the CDARS program has grown considerably this summer, according to Mark Jacobsen, president of Promontory Interfinancial Network, the company that created CDARS.

“Since mid-July, we’ve been doing about twice the business each week as we did in a typical week in January; and about three times the transaction volume we were doing a year ago. Our business in California has skyrocketed. It took us about five-and-a half-years to garner approximately 150 bank charters in California as member of our network. In the 11 days after IndyMac failed, we had requests from 40 different banks.”

IDC Deposits

Just as the CDARS program divvies your excess funds among CDs at different banks, IDC Deposits does the same with money market accounts. Its network consists of over 250 banks, allowing individuals to have FDIC coverage for up to $5 million in what’s called a MMAX account.

Another way MMAX is similar to CDARS is that the interest rate you earn may not be as good as you would get shopping around and placing your funds in various institutions yourself. But there’s a huge convenience factor to consider. With both programs you receive one statement and one 1099 for tax records.

For example, IDC currently pays banks 2 percent on deposits. The bank you do business with may give you an interest rate of 1.75 percent. That’s apparently not stopping people from going with the program.

“We are absolutely seeing an increase in business,” says IDC Deposits president Kim Weeks. “I’ll be the first to tell you that six months ago, four months ago, it was a tougher sell on the investor side because these are not great rates and we understand this. But because of everything going on right now, there’s a trade-off in the convenience and the assurance that the money is insured.”