Banks / Depository Institutions

High-value customers often seek solutions that offer greater insurance coverage, liquidity, and competitive rates, though few solutions can deliver all three.

Without the ability to offer expanded deposit insurance at scale, banks can struggle to attract and retain large-balance relationships, forcing them to compete primarily on rates or risk losing deposits altogether.

R&T helps banks compete for large balances, retain the primary customer relationship, and reduce their reliance on above-market pricing to win deposits. 

By placing funds across a network of participating institutions, banks use the Demand Deposit Marketplace (DDM) program to provide their customers access to expanded FDIC insurance coverage, while offering same-day liquidity² and comparable rates to other cash alternatives¹.

Banks often turn to paying above-market interest rates to attract and retain deposits, increasing the cost of funds and compressing net interest margins.

As competition for large balances intensifies, banks may feel pressure to continuously reprice deposits to remain competitive, reducing profitability and limiting flexibility in managing overall funding costs.

Offering access to expanded FDIC insurance through the DDM program meets customer needs and reduces pressure on banks to offer above-market rates to retain large balances. 

Institutions can set tiered pricing at the product or customer level, aligning deposit rates with balance sheet objectives while remaining competitive.

Reliance on a small number of large depositors concentrates uninsured exposure, and uninsured depositors don’t wait. When confidence in a bank wavers, they move first.

A high uninsured deposit ratio is both a regulatory trigger and an analyst signal. During periods of market stress, concentrated funding bases can trigger rapid outflows, making it harder to demonstrate stability when it matters most.

Banks break up large deposit concentration while keeping customer relationships by using the Demand Deposit Marketplace (DDM) program to distribute deposits across a network of participating institutions.

By placing excess balances within the network, banks can reduce exposure to large, uninsured depositors and create a more stable, diversified funding base.

Collateralizing public fund deposits and other large balances requires pledging high-quality liquid assets with no return. For banks without sufficient collateral, the alternative is a surety bond, which typically runs 50 to 75 basis points. Either way, the cost constrains assets that could otherwise be deployed into lending or higher-returning uses, or remain available for contingencies.

By placing funds across a network of participating institutions through the DDM program, banks can provide access to expanded FDIC insurance without relying on collateralization.

With R&T, banks can move away from collateral-heavy structures and decide how best to redeploy quality assets into higher-return uses.

Customer cash within trust and wealth management business lines is often placed in money market funds or other vehicles outside of the bank to satisfy the trust company’s fiduciary requirements, maintain liquidity, and deliver competitive rates to customers.

Limited coordination across business lines and a lack of awareness of alternatives can prevent institutions from retaining these balances within the broader banking relationship and using them as a stable, cost-effective source of funding.

Financial institutions use the Demand Deposit Marketplace (DDM) program to align trust programs/operations with broader banking objectives, distributing customer cash across a network of participating institutions in amounts eligible for FDIC insurance while remaining within the bank’s broader relationship.

R&T pioneered deposit solutions for the trust company market and continues to lead the category with deep integrations across trust accounting platforms, and we offer program structures that can help our clients manage the investment policy requirements of their customers³. Partnering with R&T allows institutions to retain and better utilize these balances within the broader banking relationship while helping the trust company meet its fiduciary and regulatory obligations³.

Banks without diversified funding sources may lack flexible, on-demand liquidity to respond to market stress or unexpected deposit outflows.

Limited access to contingent liquidity can constrain a bank’s ability to respond quickly to changing conditions, increase reliance on higher-cost funding alternatives, and raise concerns among regulators and analysts about overall funding resilience.

The Demand Deposit Marketplace (DDM) program gives banks access to a broad network of participating institutions, providing a reliable source of contingent liquidity when needed.

The network provides timely access to additional capacity, so depository institutions can respond quickly to changing conditions and support liquidity needs during times of stress.