How to Get Around FDIC Limits

With problems cropping up at so many financial institutions, investors with large deposits need to be especially careful. My earlier story reviewed how deposit insurance works at banks, savings and loans and credit unions. But what if you have deposits that exceed the Federal Deposit Insurance Corp.'s standard $100,000 limit?

The obvious solution is to spread your deposits across accounts at different institutions, but this can quickly become a record-keeping nightmare. Not to mention the hassle of visiting several banks. A relatively new service, the Certificate of Deposit Account Registry Service, or "CDARS," can do this for you.

The service, provided by Promontory Interfinancial Network, has been available for five years. About 1,825 banks and thrifts in all 50 states offer the service, which allows CD depositors with balances of up to $50 million to have their entire balances insured by the FDIC.

Getting Around FDIC Limits ...