The finance manager for a trucking company with more than $200 million in cash on deposit relates that the company made investments in 2008 that suddenly became illiquid. A large share of the company’s cash reserves were tied up in that investment. Feeling burned and without recourse, the company committed to managing its cash in much safer, albeit lower yielding, CDs. Management became ”very conservative and sensitive” following the experience.
To benefit from the protection of FDIC insurance on its CD investments, the company opened accounts with multiple banks using multiple tax ID numbers in various insurable capacities. Managing a labyrinth of accounts to ensure that protection was untenable for the amount of cash anticipated.
At that point, its local bank noticed their activity and said “we’d like those deposits.” The bank told it about CDARS, and the trucking company did its due diligence. Around the same time, the trucking company was introduced to CDARS. A strong banking relationship led the company to place as much as possible in CDARS with its core local bank. It sought out other banks that offered CDARS and has since used ICS to manage several operations accounts.
Finance Manager, Large Trucking Company