Deposits at FDIC-insured institutions are now insured up to at least $250,000 per depositor through
December 31, 2013. On January 1, 2014, the standard insurance amount will return to $100,000
per depositor for all account categories except for IRAs and other certain retirement accounts
which will remain at $250,000 per depositor. (This supersedes the October 3, 2008 changes that extended
the $250,00 until only December 31, 2009). For more information visit
Deposit Insurance Coverage Summary
or vist the
FDIC website.
CD-Station, Bonds.com, Inc.’s, online Certificate of Deposit (CD)
underwriting and management application is helping to define the future of the brokered deposit market.
CD-Station provides financial institutions a convenient and effective process of generating liquidity by
issuing Federally Insured CDs to our national and international investor network. CD-Station works in concert
with BondStation, our online fixed income trading platform, to provide a competitive marketplace to transact
and distribute CDs to self directed institutional and individual fixed income investors.
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What are Brokered Deposits?
A brokered CD is a time deposit issued by a bank, or credit union or thrift and sold by a brokerage firm to raise
deposits to meet liquidity needs. These financial institutions use brokers to market their CDs to help them generate
liquidity and expand their customer base. The rates on brokered CDs tend to be very competitive because the financial
institution is competing directly with other institutions for deposits.
Comparison of Traditional and Brokered CDs
Advantages of CDStation & the Brokered Deposit Market include:
- Technology - Ability to search multiple CD issues, create portfolios and execute online, with experienced professionals assisting throughout the process.
- Insurance – CDs issued by FDIC-insured institutions and listed on CD-Station are generally insured Up to $250,000 per account owner per institution for depository assets held in non–retirement accounts. Additional information can be found on the FDIC website.
- Liquidity – Brokered CDs trade in the secondary market at prevailing prices, which may be more or less than the original investment. The CD market price largely depends on the level of interest rates at the time of sale. However, they do not have the option of early withdrawal, and again, selling a brokered CD prior to maturity may bring in more or less than the equivalent of the proceeds of a bank CD less any early withdrawal penalty.
- Estate Feature – CD’s issued through Bonds.com, Inc. have the estate benefit, commonly referred to as the “estate feature” or “death put”, which allows an estate to redeem the CD prior to maturity, at par, in the event of death or legal incompetence of the owner.
- Customize Search Features – Ability to search CDs listed by coupon, maturity, size, pay frequency and structure.
- Time Management – An efficient way to research, locate, and purchase FDIC insured CDs to meet specific investment needs and strategies without limitation to geographical location or time constraints.
If your primary goals include principal preservation and income, CDs can serve as a sound portfolio foundation.
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Multiple Account FDIC Insurance
Under the Emergency Economic Stabilization Act, the FDIC insures up to
$250,000 per customer per
financial institution. CD-Station, through its underwriting program and extensive dealer network, provides
a wide variety of financial institutions offering insured deposits. CD-Station gives the investor the ability
to invest in CDs from multiple issuers without geographic constraints, thus increasing their deposit insurance
coverage.
An investor looking to allocate $5 million in FDIC insured deposits for one year could easily utilize the variety
of issuers with offerings on CD-Station. Building a $5 million FDIC insured CD portfolio can be accomplished
by allocating $500,000 into 10 separate issuers in a joint account, as illustrated in our
demo portfolio.
An investor could also benefit from the FDIC Deposit Insurance Coverage
limits to maximize the insurance coverage amount for the different account ownership categories
recognized by the FDIC. The increase in FDIC Insurance Coverage
could potentially permit an owner to invest in excess of $1,000,000 in insured
deposits, per issuer, up until December 31, 2009, by utilizing the Basic Coverage Limits.
For example: An investor could insure deposits in excess of $1 million, per issuer, simply by investing:
ABC Bank, 4.00% 1 Year CD
- $250,000 in a Single Account
- $250,000 in a Joint Account
- $250,000 in an IRA
- $250,000 in a Trust Account
- $250,000 in a Corporate Account
| Basic FDIC Deposit Insurance Coverage Limits* |
| Single Accounts (owned by one person) |
$250,000 per owner |
| Joint Accounts (two or more persons) |
$250,000 per co-owner |
| IRAs and certain other retirement accounts |
$250,000 per owner |
| Trust Accounts |
$250,000 per owner per beneficiary subject to specific limitations and requirements |
| Corporation, Partnership and Unincorporated Association Accounts |
$250,000 per corporation, partnership or unincorporated association |
| Employee Benefit Plan Accounts |
$250,000 for the non-contingent, ascertainable interest of each participant |
| Government Accounts |
$250,000 per official custodian |
| Non-interest Bearing Transaction Accounts |
Unlimited coverage – only at participating FDIC-insured banks and savings associations * |
*On January 1, 2010, the standard coverage limit will return to $100,000 for all deposit categories except IRAs and Certain Retirement Accounts, which will continue to be insured up to $250,000 per owner.
If you have questions about FDIC coverage limits and requirements, visit www.myFDICinsurance.gov, call toll-free 1-877-ASK-FDIC.
1 Emergency Economic Stabilization Act temporarily increased the basic limit on deposit
insurance for all account ownership categories from $100,000 to $250,000. This increase is
effective from October 3, 2008 to December 31, 2009. IRAs and certain other retirement accounts
for which the deposit insurance limit already was $250,000 prior to October 3, 2008 will
continue to be insured up to $250,000. After December 31, 2009, account ownership categories
for which the deposit insurance limit was $100,000 prior to October 3, 2008 will revert to the $100,000 limit.