A LOOK AT
HOW ICS & CDARS WORK
With an ICS cash sweep account, excess funds are taken from one account at the close of business and swept into one or more accounts automatically. Since sweep accounts maintain liquidity by using money market and demand deposit accounts, your cash can easily be swept back whenever you need access to it.
When a bank places your funds in ICS, that deposit is sent from the transaction account to deposit accounts at other ICS network financial institutions across the country in amounts below the standard FDIC threshold. As a result, all the funds remain eligible for FDIC insurance.
CDARS works in much the same way, but excess funds are instead swept into member-institution certificates of deposit. This method helps ensure a consistent rate of return and that both the principal and interest remain covered by the maximum amount of FDIC insurance.
Both products are for large depositors of all types looking to increase their FDIC insurance coverage while earning an interest return. You get to continue the relationship with the financial institution you know and trust, while enjoying the coverage and protection from many others.
Sweep accounts aren’t exclusively available for businesses, either. Public funds for local governments, schools, police departments, hospitals, utilities, and more can be swept into interest-bearing accounts that are eligible for FDIC insurance. This can make it simple to both earn a return on large balances and protect the public’s vital resources.
