Systems and methods for money fund banking with flexible interest allocation
This invention provides system and methods for managing accounts of clients at customer financial entities so that deposits of up to $100,000 or greater are insured, so that interest income earned on a portion of all of the account balances may be flexibly allocated according to customer instructions, and so that withdrawals are not limited. These objects are satisfied by holding client funds at interest-earning money market deposit accounts at one or more banks or savings institutions. More particularly, this invention provides methods for receiving client transaction information, determining a net transfer of funds into or out of each client account from transaction information, causing transfer of funds from the insured, interest-bearing deposit accounts to match the net transfer of funds into or out of each client account, and allocating interest earned by the deposit accounts to clients according to customer instructions. This invention also provides systems and software products implementing these methods.
1. A method, comprising:
(A) accessing, using one or more computers, one or more electronic databases, stored on one or more computer-readable media, comprising:
(i) aggregated account information for one or more government backed-insured and interest-bearing aggregated deposit accounts held in one or more supporting financial entities in a program, wherein funds from client accounts of a plurality of clients are held with funds of other client accounts in the one or more aggregated deposit accounts held in the one or more supporting financial entities in the program; and
(ii) client account information for each of the respective client accounts, wherein the client account represents funds of the respective client held in the one or more aggregated deposit accounts holding funds of the respective client, the client account information comprising a respective balance of funds from the respective client account held in each of the one or more insured and interest-bearing aggregated deposit accounts holding funds of the respective client account; and
(B) determining or having determined or obtaining, using the one or more computers, a respective balance for each of more than one of the client accounts;
(C) determining or having determined or obtaining, using the one or more computers, for each of multiple of the respective client accounts a respective interest rate from among at least three different interest rates based at least in part on one or more criteria, so that funds of some client accounts held in one of the one or more aggregated deposit accounts earns interest at a different interest rate from the funds of other client accounts held in the one aggregated deposit account;
(D) calculating or having calculated or obtaining, using the one or more computers, for each of one or more of the client accounts having a first interest rate of the at least three interest rates, a respective interest for funds of the respective client account held in the one or more aggregated deposit accounts for a period using the first interest rate, with the calculating being independent from the respective client account pro rata share in earnings posted for the one or more aggregated deposit accounts holding funds of the respective client account;
(E) calculating or having calculated or obtaining, using the one or more computers, for each of one or more of the client accounts having a second interest rate of the at least three interest rates, a respective interest for funds of the respective client account held in the one or more aggregated deposit accounts for the period using the second interest rate, with the calculating being independent from the respective client account pro rata share in earnings posted for the one or more aggregated deposit accounts holding funds of the respective client account;
(F) determining or having determined or obtaining, using the one or more computers, interest earned on funds held during the period in each of the one or more aggregated deposit accounts in the program; and
(G) updating or having updated the one or more electronic databases, using the one or more computers, to include the respective interest for each of more than one of the respective client accounts based at least in part on the respective interest rate determined for the funds of the respective client account held in the one or more aggregated deposit accounts.
2. The method as defined in claim 1 , wherein the one or more criteria comprises at least one of the following criteria selected from the group of:
(i) a date on which the respective client account was opened;
(ii) a duration associated with the respective client account;
(iii) a duration associated with the respective interest rate;
(iv) a promotional rate;
(v) the respective balance of funds in the respective client account;
(vi) a respective client financial entity associated with the respective client account;
(vii) a respective residence of the respective client;
(viii) a customer type;
(ix) an amount invested by the respective client in the respective customer financial entity;
(x) an amount borrowed by the respective client from the respective customer financial entity; and
(xi) a length of time that the respective client has transacted business the respective customer financial entity.
3. The method as defined in claim 1 , wherein at least one of the one or more supporting financial entities is a bank and the one or more government backed-insured and interest-bearing aggregated deposit accounts comprise at least one Federal Depository Insurance Corporation (FDIC)-insured aggregated deposit account held therein.
4. The method as defined in claim 1 , wherein at least one of the one or more supporting financial entities is a bank and the one or more government backed-insured and interest-bearing aggregated deposit accounts comprise a Federal Depository Insurance Corporation (FDIC)-insured aggregated money market deposit account held therein.
5. The method as defined in claim 1 , wherein at least one of the one or more supporting financial entities is a bank and the one or more government backed-insured and interest-bearing aggregated deposit accounts comprise at least one Federal Depository Insurance Corporation (FDIC)-insured aggregated NOW account held therein.
6. The method as defined in claim 1 , wherein at least one of the one or more supporting financial entities is a credit union.
7. The method as defined in claim 1 , wherein at least one of the client accounts is associated with a customer financial entity which had accepted the client funds from the respective client.
8. The method as defined in claim 7 , wherein the customer financial entity is a broker/dealer.
9. The method as defined in claim 7 , wherein the customer financial entity is a savings institution.
10. The method as defined in claim 7 , wherein the customer financial entity is a credit union.
11. The method as defined in claim 7 , wherein the customer financial entity is an investment advisor.
12. The method as defined in claim 1 , wherein for at least one of the one or more supporting financial entities, the supporting financial entity is a bank, and the one or more government backed-insured and interest-bearing aggregated deposit accounts comprises an FDIC-insured aggregated money market deposit account held therein, and the bank further has an FDIC-insured aggregated demand deposit account associated with the program; and
wherein the method further comprises generating or have generated instructions to withdraw funds from the FDIC-insured aggregated money market deposit account through the FDIC-insured aggregated demand deposit account.
13. The method as defined in claim 1 , wherein there are a plurality of supporting financial entities and a plurality of government backed-insured and interest-bearing aggregated deposit accounts.
14. The method as defined in claim 13 , further comprising:
allocating, using the one or more computers, funds of client accounts among the plurality of supporting financial entities, based on one or more parameters; and
generating or have generated instructions to deposit to and/or to withdraw funds from at least one of the government backed-insured aggregated deposit accounts for use in transferring funds.