Demand Deposit Marketplace® (DDM®) Program
Access to Expanded Deposit Insurance Coverage with our Flexible Cash Management Program
Strategically manage your deposit funding needs and precisely manage your balance sheet liquidity levels with the Demand Deposit Marketplace (DDM) program.
The DDM program enables banks, trust departments, credit unions, and other financial institutions to offer its customers access to millions of dollars in expanded deposit insurance coverage, while also enabling those institutions to strategically manage daily liquidity1 and offer its customers’ rates that are competitive with other sweep options.2 The DDM program serves as a flexible balance sheet management tool for participating banks and credit unions — providing access to wholesale funding and a ‘reciprocal deposits’ feature with the ability to increase or decrease the deposit amounts on the institution’s balance sheet at any time.
Whether your bank has excess liquidity, requires more deposits, or seeks to maintain deposit levels while offering its customers access to expanded insurance coverage on their deposits, the DDM program has a deposit solution that is right for you.
Offer Your Customers
- Access to millions in expanded deposit insurance coverage
- Daily liquidity1
- Rates that are competitive with other sweep options2
Benefits for Banks & Credit Unions
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Additional Source of Funds: Retain higher levels of insured, non-brokered reciprocal deposits and access to stable wholesale funding.3
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Attract Customers: Deepen relationships with existing customers and attract new ones such as Corporate, Public Funds, HNW/UHNW individuals and Trust accounts.
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Flexible & Customizable: Send, receive or reciprocate customer deposits based on your needs.
Benefits for Trust & Wealth Managers
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Safety: Access to expanded deposit insurance coverage.
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Liquidity: Liquid alternative to money market funds; not subject to liquidity fees/redemption gates.
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Rates/Yields: Rates are competitive with other sweep options.2
1 Under the DDM program, funds are deposited into demand deposit accounts (DDAs) or money market deposit accounts (MMDAs) at receiving banks or share draft accounts or share accounts at receiving credit unions. While your customers’ funds are held in MMDAs or share accounts, the return of your customers’ funds from the DDM program may be delayed as, under federal regulations, the receiving institution is permitted to impose a delay of up to seven days on any withdrawal request from an MMDA or share account.
2 While interest rates obtained on funds placed at receiving institutions under the DDM program may, under certain circumstances, outperform cash alternatives, such as money market funds, the primary objective of the DDM program is to provide customers with convenient access to expanded deposit insurance coverage on their funds (and not for investment enhancements or higher rates of returns or profits).
3 Subject to applicable laws, regulation and rules relating to brokered deposits, including 12 CFR 337.6. R&T makes no representations or warranties, express or implied, with respect to an institution’s classification of deposits as brokered or not brokered. Such determination is entirely and solely the responsibility of that institution.
1 Under the DDM program, funds are deposited into demand deposit accounts (DDAs) or money market deposit accounts (MMDAs) at receiving banks or share draft accounts or share accounts at receiving credit unions. While your customers’ funds are held in MMDAs or share accounts, the return of your customers’ funds from the DDM program may be delayed as, under federal regulations, the receiving institution is permitted to impose a delay of up to seven days on any withdrawal request from an MMDA or share account.
2 While interest rates obtained on funds placed at receiving institutions under the DDM program may, under certain circumstances, outperform cash alternatives, such as money market funds, the primary objective of the DDM program is to provide customers with convenient access to expanded deposit insurance coverage on their funds (and not for investment enhancements or higher rates of returns or profits).
3 Subject to applicable laws, regulation and rules relating to brokered deposits, including 12 CFR 337.6. R&T makes no representations or warranties, express or implied, with respect to an institution’s classification of deposits as brokered or not brokered. Such determination is entirely and solely the responsibility of that institution.
How it Works
Cash balances in your customer’s account at your institution are swept or placed into the DDM program. Those balances are allocated and deposited into deposit accounts at receiving institutions that participate in the DDM program in increments of up to $250K per customer identifier (e.g., TIN) up to the relevant program limit. The result is that your customer can access an expanded level of deposit insurance coverage on its eligible funds while maintaining daily access to its funds through a single relationship with your institution.
DDM Program Options
With up to four types of deposit relationships available, the DDM program offers the flexibility to increase or decrease the amount of deposits on your balance sheet at any time.
Send-Only
Send excess deposit balances
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Access to millions in deposit insurance coverage
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Generate fee income
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Warehouse funding on-balance sheet deposits
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Reduce balance sheet
Receive-Only (Funding Solutions)
Receive deposit funding
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Diversify wholesale funding sources
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Fund loan demand
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Strengthen balance sheet
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Supplement contingency funding plan
Reciprocal
Exchange deposits (dollar for dollar)
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Access to millions in deposit insurance coverage
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Receive equal insured deposits in return
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Manage costs
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Non-brokered treatment (up to $5 billion or 20% of liabilities)*
*Subject to applicable laws, regulation and rules relating to brokered deposits, including 12 CFR 337.6. R&T makes no representations or warranties, express or implied, with respect to an institution’s classification of deposits as brokered or not brokered. Such determination is entirely and solely the responsibility of that institution.
Reciprocal Plus/Minus
Exchange deposits (any desired ratio)
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Access to millions in deposit insurance coverage
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Increase/decrease target deposit levels dynamically
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Participating institution determines reciprocal target
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Send or receive balances above or below the reciprocal target
*Subject to applicable laws, regulation and rules relating to brokered deposits, including 12 CFR 337.6. R&T makes no representations or warranties, express or implied, with respect to an institution’s classification of deposits as brokered or not brokered. Such determination is entirely and solely the responsibility of that institution.
The sweep deposit program provides a stable source of funding with flexibility around target balances to address our evolving funding needs over the years.
Senior Vice President, Wholesale Funding & Liquidity
National Bank
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