Method for fully insuring large bank deposits using a plurality of banks that receive portions of each large deposit
View Patent ↗An Interbank Deposit Placement System (IDPS) that allows banks participating in the service to offer their customers multiple deposits so that potential deposit (fund) amounts exceeding an applicable Federal deposit insurance limit (e.g., $100,000) are fully insured. The IDPS partitions each of the potential deposit amounts into a plurality of deposit portions that do not exceed the Federal deposit insurance limit. In one embodiment, a proposed list of banks to which the deposit portions are allocated is presented to a recipient (e.g., bank representative, depositor) who is offered the option of modifying the proposed list during an established time window. After the time window expires, a deposit is established on behalf of each bank on the list to which the specific deposit portion was allocated by the processor.
1. An automated method of processing funds in amounts that are subject to an established deposit insurance limit so that the funds are eligible to be fully insured, the funds being assigned to a processor that creates a plurality of deposits on behalf of a plurality of banks for depositors of the funds, the method comprising:
(a) receiving at the processor a plurality of orders to process the funds, each order including an indication of the maturity of the deposits to be established;
(b) sorting, using the processor, the deposits to be established by maturity;
(c) partitioning, using the processor, each of the fund amounts into a plurality of deposit portions, each deposit portion not exceeding the established deposit insurance limit; and
(d) allocating by the processor each of the deposit portions to a specific one of the banks, each specific deposit portion being used to establish a deposit for one of the banks that the deposit portion was allocated to, and wherein the maturity-sorted deposits are allocated so as to match deposits of the same maturity for each bank contributing funds with the funds allocated to the respective bank.
2. The method of claim 1 wherein each order further includes an indication of the interest rate of the deposits, the method further comprising:
(e) establishing a settlement account for each of the banks;
(f) comparing, using the processor, the interest rate specified or paid by each specific bank for a particular deposit maturity to an interest rate established by the processor for the particular maturity; and
(g) calculating, using the processor, payments to be credited to or debited from the settlement account of each of the banks based on differences between the interest rates specified or paid by the respective banks and the interest rate established by the processor for the particular maturity.
3. The method of claim 2 further comprising:
(h) in response to each order, making available to a recipient a proposed list of banks to which the deposit portions are allocated, and offering the recipient the option of modifying the proposed list during an established time window; and
(i) establishing, using the processor, a deposit for the recipient on behalf of the bank on the list to which the specific deposit portion was allocated by the processor after the time window expires.
4. The method of claim 3 wherein the recipient is at least one of a representative of the bank that placed the order and the depositor associated with the order.
5. The method of claim 1 wherein the established deposit insurance limit is in accordance with a deposit insurance program in the United States.
6. The method of claim 1 wherein the established deposit insurance limit is in accordance with a deposit insurance program operated by the U.S. Federal Deposit Insurance Corporation (FDIC).
7. The method of claim 1 wherein the established deposit insurance limit is in accordance with a deposit insurance program operated by the National Credit Union Administration (NCUA).
8. The method of claim 1 wherein the established deposit insurance limit is in accordance with the deposit insurance program of a foreign jurisdiction.
9. The method of claim 1 wherein the banks are unaffiliated with one another.
10. The method of claim 1 wherein each amount of funds is less than or equal to the established deposit insurance limit.
11. The method of claim 1 wherein each amount of funds exceeds the established deposit insurance limit.
12. An automated method of processing funds in amounts that are subject to an established deposit insurance limit so that the funds are eligible to be fully insured, the funds being assigned to a processor that creates a plurality of deposits on behalf of a plurality of banks for depositors of the funds, the method comprising:
(a) partitioning, using the processor, each of the fund amounts into a plurality of deposit portions, each deposit portion not exceeding the established deposit insurance limit;
(b) allocating by the processor each of the deposit portions to a specific one of the banks;
(c) presenting to a recipient a proposed list of banks to which the deposit portions are allocated, and offering the recipient the option of modifying the proposed list during an established time window; and
(d) establishing, using the processor, a deposit for the recipient on behalf of the bank on the list to which the specific deposit portion was allocated by the processor after the time window expires.
13. The method of claim 12 wherein the recipient is at least one of a representative of the bank that placed one of the fund amounts and the depositor associated with the one fund amount.