CDARS & ICS Solutions to Support Business Operations
August 14, 2024
As your business grows and builds wealth over time, you may discover that you need more comprehensive business banking services to protect your finances. If your business bank accounts have grown from thousands to millions of dollars, you need financial solutions that provide enhanced protection for your deposits, while also offering the ability to earn interest.
Texas Gulf Bank offers strategic, flexible banking services that allow your business to access multi-million-dollar FDIC insurance protection while positioning your wealth for continued growth.
Learn how CDARS® and ICS® services may be able to support your business operations with a seamless, streamlined approach to multi-million-dollar account management.
The Risks of Unprotected Business Wealth
First, let’s review why it’s important to consider CDARS / ICS solutions. You may have questions about why you should consider these services, as opposed to relying on traditional business banking and CDs. Let’s examine the risks of not taking an extra step to protect business wealth.
Successfully managing and protecting a large balance can be a challenge for business owners, especially with existing limits on how much money can be protected by insurance per depositor, per ownership category at each FDIC-insured bank.
Currently, the FDIC (Federal Deposit Insurance Corporation), is a United States government agency that provides deposit insurance coverage for depositors of FDIC-insured banks.
The FDIC standard maximum deposit insurance limit is $250,000 per depositor, per ownership category at each FDIC-insured bank. Anything over the maximum deposit insurance amount is considered uninsured, meaning the individual or business could lose access to funds that exceed the FDIC standard limit.
Some businesses opt to spread their cash across multiple banks to maintain FDIC protection to avoid the risk of being underinsured. Unfortunately, this effort requires business owners to manage multiple bank relationships, which can make it more difficult to invest and grow wealth or have up-to-date financial records.
Also, having business assets spread across multiple bank accounts can make it more difficult for your company to access funds for large purchases or cover major operational costs. This setup can create unnecessary delays in making tax or payroll payments or quickly purchasing inventory, raw materials, or critical business equipment when needed most.
How Do CDARS ICS Services Help?
To help mitigate the risks for large-deposit business owners, CDARS® (Certificate of Deposit Account Registry Services) and ICS® (IntraFi Cash Services) can be effective tools designed to simplify the account management process.
CDARS and ICS services allow your business to make large deposits into a single custodial bank, which then divides the deposit into smaller amounts that meet the $250,000 FDIC coverage limit. These smaller amounts are placed with other banks that also participate in CDARS or ICS networks, ensuring your full deposits are eligible for FDIC protection through each member bank.
With both services, funds may be accessed at any time*, giving your business the opportunity to make large payments or purchases without unnecessary delays. This can lead to more efficient business operations and the ability to quickly take advantage of unexpected investment opportunities.
*Note:
CDARS funds withdrawals may be subject to Early Withdrawal Penalties.
ICS funds withdrawals may be limited as follows: Unlimited program withdrawals (using ICS demand option) or up to six program withdrawals per month (using the ICS savings option, such as money market deposit accounts).
Your business may also enjoy the peace of mind that comes from fully protecting cash assets through FDIC coverage, as well as a consolidated account management system and unified reporting for accurate financials.
CDARS or ICS: Which Is Best for Your Business?
Although both CDARS and ICS banking services can help simplify how you manage your business bank accounts and large deposits, they provide different methods for how your money is managed and can grow over time.
Each tool’s unique functionality allows your business to use excess cash balances instead of simply keeping them in a traditional bank account that may not earn interest.
Using CDARS
With CDARS®, funds are placed into bank CDs that mature over time. Although business assets are still accessible, it’s an ideal option for businesses that want a long-term financial solution that typically provides a stable interest rate for sustained growth.
Using ICS
For businesses that want funds to remain liquid and easily accessible, ICS® may be a better short-term banking solution. ICS places funds into demand deposit accounts and money market deposit accounts with participating ICS member banks, giving your business financial flexibility and quick access.
CDARS and ICS: Both are Protected
Whether your business chooses CDARS or ICS for managing business assets, Texas Gulf Bank helps ensure your business wealth is protected and well-managed. In addition to receiving monthly statements detailing all asset balances and accumulated interest, customers can also access ICS balances online for up-to-date account reporting.
Texas Gulf Bank: Protecting Business Wealth for Over 100 Years
As a banking cornerstone in the Southeast Texas Gulf Coast region for over 110 years, Texas Gulf Bank has the regional insight and banking expertise needed to help your business flourish.
Our dedicated Treasury Management department offers a full range of exceptional business banking options – including CDARS / ICS services – to help you manage your large deposits in a secure, streamlined way.
Contact Texas Gulf Bank today to learn more about using these tools to grow your business and support business operations. We look forward to partnering with you to find the right solution that may help protect and grow your business wealth.
Services offered through the Treasury Services Dept are fee-based and subject to approval.
Note: ICS®, and CDARS® are registered service marks within the IntraFi Network, LLC.