A friend sent me information on CDARS and a link to the website.
Certificate of Deposit Account Registry Service
It looks interesting, has anyone here heard of this? I'm guessing that the rate they give is not that great?
I use CU's so this does not work for me. I do, however, wonder 1. What is the rate, 2. Penalty/availability, 3. does the term remain the same or change? Wonder if any information besides the web site (which is a bit hazy and does not really answer 1, 2, or 3).
I called one of the banks in my area that was on the list as participating. The way it works is they participate in an auction on Wed, the rates are then set from that auction. The rates could change weekly but once you've locked in the rate stays the same for that term.
She gave me rates that were not final yet but she was pretty sure they would come in this way.
This was based on $250k
1 mo 3.65%
3 mo 3.93%
6 mo and 1 yr 3.94%
I also called the bank I deal with that was on the list, they've been bought and the parent bank does not participate. She said they had some way of doing it within the family of banks they now belong to but didn't have information on it yet.
That is pretty sad -- $250K investment. Today, and this is probably the lowest they have been in the last year or so, I can get about 100 basis points (1%) above that for as little as a $500 CD at one any one of the CU I usually deal with for CD's (fully NFCU insured; up to about $1.2MM if you use three separate institutions). But it is interesting to see what Banks continue to develop to change our savings methods.
Interesting also is the methods some Credit Unions are developing too. Not in this area of CD's but in the area that allows you to go to any other CD (that participates) and using you membership card from one CU and your Drivers License to make transactions on your "home" account. Good for when you travel away from the "home" institution.
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