Jumbo Certificates of Deposit
FISN Deposit Administration Program
FISN Deposit Administration CD Program
The FISN Deposit Administration Program provides full management of both the funds and the information for an entire CD portfolio of jumbo CDs. Selection of this program authorizes FISN to not only obtain the highest return for the jumbo CDs but to also handle all the administrative aspects of investing in CDs. Basically, you are able to enjoy the full benefits of jumbo CDs and avoid the paperwork details and institution contact while maintaining control.
How Does It Work
The program is available to clients with portfolios of 10 jumbo CDs or more. First, you set your CD portfolio goals and send one wire to FISN for the total investment. FISN will select the best set of CDs and wire $99,000 on your behalf to each insured CD issuer. All the jumbo CD interest and paperwork are directed to the FISN administrative staff rather than to the CD client. We will proof these documents, return whatever is necessary and safe keep your records. FISN will collect the interest, deposit it and reconcile it with the forecasted interest. Monthly, we will report to the CD client. Principal funds will be available at programmed maturity dates.
The focus of the Deposit Administration Program is to achieve your investment goals of earning the highest return within your investment parameters. The three parameters are liquidity, depository risk, and control of principal. You can define the liquidity parameter as to how often you want access to your principal via programmed maturity dates. You designate a standard jumbo CD term or a standard maturity interval for a laddered approach to maturing funds. Of course, a longer term always earns you a higher return. FISN believes CDs are a risk free investment with no financial exposure to principal or interest if issued by an insured depository. Although the foregoing is true, depository risk, consisting of possible inconvenience and uncertainty, can be diminished by specifying criteria for higher quality issuers versus less solvent, insured issuers. Control of principal ranges from limited FISN control, where you handle the principal outside the issuer network and we handle interest collection, to full FISN control where FISN processes all funds.
CD Selection does not differ in the Deposit Administration Program. Normally we suggest the highest yielding CDs based upon institution criteria specified on each investment occasion by the client. Criteria are based upon the client's need to avoid depository risk. In this program, CDs are selected based upon pre-established portfolio goals that are followed until modified by the client. We still follow your directions but don't necessarily interface with you by telephone prior to each placement. All jumbo CDs will be for $99,000 to ensure the maximum investment and full insurance of principal and interest below the $100,000 limit. Monthly payment of interest is always requested. Only institutions insured by the FDIC are selected and no more than one CD is placed with each issuer. We will send out a CD Notice following each placement confirming the terms of the CDs that are part of the Deposit Administration Program.
All CDs are registered in the Client's name and will utilize FISN's address at 4800 Montgomery Lane, Suite 400 Bethesda, MD 20814. Jumbo CD paperwork composed usually of a safekeeping receipt, signature card and IRS Form W9 will go to FISN. FISN will set up a file and establish a CD Record for each jumbo CD. FISN will verify the terms of the CD, make copies and return the required items to the issuer. With each CD, we will also provide issuers with a copy of your corporate resolution authorizing FISN to act on your behalf. As the deposit administrator, FISN will process all documents and information requests promptly. Special care will be given to fully control and document all aspects of the placements. Our program will be available for inspection upon your request.
All interest will come to FISN for handling. Incoming checks will be processed upon receipt so cash can begin earning additional interest as soon as possible and to minimize depository risk. Checks will be copied prior to deposit, the amounts will be verified against forecasted interest and recorded in the Interest Receipt Report system. Differences between total interest accrued and total interest received will be rectified by maturity. Checks will be either deposited in a client account at a local bank, or in an SIPC insured securities account that earns a competitive rate of interest.
Reporting To The Client
Monthly, FISN will fully inform the client of their holdings with a single mailing of several reports which pulls together all aspects of the Deposit Administration Program. First, we will forward our standard Portfolio Report which indicates all outstanding jumbo CDs at month-end. Secondly, we will provide a cumulative CD Notice for the reporting month showing all new CDs placed that month. Third, we will send our standard Maturity Forecast which alerts you to upcoming jumbo CD maturities available for reinvestment or return to the client. Fourth, we will give you a special Cash Flow Report which reports interest on an accrual basis earned for the calendar month. Fifth, we will provide you with an Interest Receipt Report which details the receipt and deposit of all interest checks received by FISN This receipt record will also track the cumulative interest accrued and compare it to the cumulative interest received. Sixth, we will send you an Interest Receipt Maturity Report for each individual CD following its maturity. This report will document the complete interest receipt history for the matured CD with dates and amounts of each interest payment. It will enable the CD investor to validate the interest earnings related to each CD. Lastly, we will send the original bank deposit receipts validated by the bank receiving the consolidated interest deposits corresponding to the dates and amounts on the Interest Receipt Report. This series of reports provides information for a full review of the portfolio each month.
Service fees for the Deposit Administration Program are separate from FISN's placement fees. Fees for the Deposit Administration Program are geared to the length of the term of the CD. CDs with a term of one year or longer are assessed a $50 fee per annum, CDs with a term of 6 and 9 months are assessed a $40 fee and 3 month CDs are at $30. Fees are invoiced at month-end and due within 10 days.