Money fund banking system
Providing interest to clients' deposited funds without the legal limitation on the number of demand withdrawals from deposit accounts is accomplished by an administration system that keeps all of the records for the clients' deposits and withdrawals, calculates the total of the deposits and withdrawals for all clients, and uses the calculation to determine whether funds are deposited to or withdrawn from a single deposit account in which all clients' deposit funds are kept. Clients can make unlimited withdrawals, such as by check, credit card, debit card, or electronic transfer, through the administrator. By placing the administrator as the holder of a single account, legal exemptions to the limitation on earning interest in demand accounts is facilitated.
1. A system for managing a plurality of client transaction accounts of a banking institution associated with a plurality of respective clients of the banking institution for a plurality of transactions, comprising:
one or more computers programmed to be capable of performing the following operations:
(a) accessing one or more databases for carrying out one or more of the following steps, wherein the database comprises information for each client transaction account, wherein client transaction account funds for the client transaction accounts are aggregated in one or more FDIC-insured and interest-bearing aggregated deposit accounts held at the banking institution, and wherein the information for each of the client transaction accounts includes information on each client's funds held in said one or more insured and interest-bearing aggregated deposit accounts;
(b) administering client deposits/transfers to and withdrawals/transfers from said client transaction accounts using the one or more computers, said administering step comprising processing more than six (6) withdrawals/transfers selected from the group consisting of check, debit card, ACH, and credit card within a month from each of a plurality of said client transaction accounts;
(c) determining by the one or more computers on a regular basis at least one aggregated net transaction for a plurality of said clients comprising a sum of said clients' deposits/transfers to and withdrawals/transfers from said respective clients' transaction accounts at the banking institution;
(d) determining by the one or more computers from said at least one aggregated net transaction whether to deposit/transfer funds to or withdraw/transfer funds from said one or more FDIC-insured and interest-bearing aggregated deposit accounts;
(e) processing needed deposits/transfers to, or needed withdrawals/transfers from said one or more FDIC-insured and interest-bearing aggregated deposit accounts based on said determining from said at least one aggregated net transaction step, so that more than six (6) withdrawals/transfers are made during a month from one of said one or more FDIC-insured and interest-bearing aggregated deposit accounts via at least one intermediate bank that is different from the banking institution; and
(f) updating by the one or more computers the database with each client's deposits/transfers to and withdrawals/transfers from said each client's respective transaction account.
2. The system of claim 1 , wherein said one or more computers are programmed to make withdrawals by draft or check, credit card, sweeps, wire or electronic transfer and combinations thereof.
3. The system of claim 1 , wherein the one or more computers are further programmed to deny a withdrawal transaction from one of the client transaction accounts if that client transaction account does not have sufficient funds to cover that withdrawal transaction, or access to sufficient margin or line of credit.
4. The system of claim 1 ,
wherein said one or more computers are programmed to facilitate a manner of making said withdrawals/transfers and/or deposits/transfers from at least one of said one or more FDIC-insured and interest-bearing deposit accounts to preserve that account's interest-bearing status regardless of the number of said withdrawals and/or transfers from said at least one of said one or more FDIC-insured and interest-bearing deposit accounts.
5. The system of claim 1 , further comprising the one or more computers programmed to be capable of performing the step of, after accrual in the one or more aggregate deposit accounts, distributing interest to each of the client transaction accounts in dependence on a balance in that respective client transaction account.