How the DDM Program Works

Under the DDM Program, a Source Institution acts as a custodial agent for its customer to sweep or place its customer’s cash balances into deposit accounts, known as Program Accounts, at one or more Receiving Institutions that participate in the DDM Program. Customer Funds (both principal and any earned interest that remains in the Program Accounts) are allocated to Receiving Institutions in increments of up to then-current standard maximum deposit insurance amount (“SMDIA”) (currently $250,000) per Customer Identifier, per Receiving Institution, up to the relevant Source Institution’s Program Limit (other than any Excess Funds) which are placed at Excess Institutions. The result is that the Customer is eligible to access an expanded level of deposit insurance coverage on its funds up to the Source Institution’s Program Limit.

Program Limits

DDM Program Limit

R&T sets an overall deposit insurance coverage limit for the DDM Program known as the “DDM Program Limit”. The DDM Program Limit is the maximum dollar amount of Deposit Insurance coverage available to access, per eligible depositor (based on Customer Identifier (e.g., TIN)) under the DDM Program. The DDM Program Limit may change, from time to time, as it generally depends on the number of Receiving Institutions that participate in the DDM Program and their willingness and ability to accept DDM Program deposits. The most current DDM Program Limit is set forth on R&T's DDM Program Limit website page. R&T notifies participating Sending Institutions whenever the DDM Program Limit changes.

Sending Institution's Program Limit

Customers may be eligible to access deposit insurance coverage above the standard limit available at a single Participating Institution. The maximum amount of deposit insurance coverage available through such an arrangement is the Sending Institution's Program Limit, which is established by the Sending Institution and may change from time to time.

The Sending Institution's Program Limit may vary based on the Receiving Institutions made available through the DDM Program and their willingness and ability to accept deposits, but it may never exceed the overall DDM Program Limit established by R&T.

Target Balance Sweep

A Sending Institution may offer Customers a target balance sweep arrangement. Under this approach, the Sending Institution establishes a target balance for a Customer account. If the balance in the Customer account exceeds the target balance, funds may be automatically transferred each business day from the Customer account to participating Receiving Institutions through the DDM Program.

If the balance in the Customer account falls below the target balance, funds may be automatically transferred each business day from the Receiving Institutions through the DDM Program back to the Customer account to restore the target balance.

Allocation Process

R&T allocates Customer Funds to Receiving Institutions pursuant to its proprietary Allocation Process, which relies on a number of factors described in the Program Customer T&Cs, such as program limits, capacity, and operational parameters (including opt-outs of Receiving Institutions).

→ See: Allocation Process

Program Accounts

Customer Funds swept or placed into the DDM Program are deposited into Program Accounts at one or more Receiving Institutions pursuant to the Allocation Process. Typically, each Receiving Institution establishes one omnibus Program Account to maintain all Customer Funds allocated to that Receiving Institution under the DDM Program. A Program Account is required to be a DDA,MMDA², or GL.

Opt-Outs

A Sending Institution can exclude (i.e., opt-out of) Receiving Institutions in the program it offers its Customers. In addition, Customers can opt-out of Receiving Institutions to which the Customer does not wish to sweep or place its deposits.

If a Sending Institution excludes (“opts-out of”) any Receiving Institutions from holding its Customers’ funds under the DDM Program, the Sending Institution’s Program Limit may be lower than the overall DDM Program Limit that is set, from time to time, by R&T. In addition, if a Customer opts-out of one or more Receiving Institutions from holding its funds under the DDM Program, the Sending Institution’s Program Limit for that particular Customer may be reduced, as there would be fewer Receiving Institutions to hold the Customer’s funds.

→ See: Receiving Institution Opt-Outs

Excess Funds

A Sending Institution may permit its Customers to place Excess Funds (funds above the Sending Institution’s Program Limit). In such case, those funds may be allocated to any Receiving Institution (known as Excess Institutions) and would not receive access to Deposit Insurance coverage (subject to FDIC or NCUA laws and regulations, which may permit access).

Daily Withdrawal

Customers retain access to their deposits on a daily basis through their account at the Customer’s primary relationship institution (i.e., their Sending Institution).

Participation Options

The DDM Program also offers various participation options that a participating institution can use to help manage their excess balances, receive funding, exchange deposits or offer expanded Deposit Insurance coverage to their Customers. Each option supports different balance-sheet objectives and some benefits appear across multiple types because they address shared liquidity and Deposit Insurance needs. Within these participation options, institutions can adjust their participation over time based on liquidity goals, funding requirements, or Customer demand. These options are designed to be flexible, allowing Participating Institutions the ability to increase or decrease deposit levels without disrupting Customer accounts or their operational workflows.

→ See: Participation Options.

Client Segments

The DDM Program supports participation from a wide range of financial institutions, each with a defined relationship structure, Direct-Source or Indirect-Source operating models, and a set of eligible participation options. These parameters reflect R&T and other regulatory requirements, operational configurations, and the institution's participation and role within the DDM Program.

The sections below outline how these various institutions can interact within the DDM Program, and the participation options available to them.

Traditional Bank Relationship

• Direct-Source operating model
• Available participation options:
  • Send-Only​
  • Receive-Only​
  • 100% Reciprocal​ (specific to the bank-affiliated with the trust company)
  • Reciprocal Plus and Reciprocal Minus

Bank Affiliated Trust Company & Federally Chartered Trust Company Relationship

• Trust Company affiliated with a Bank​
• Federally Chartered Trust​ Company
• Direct-Source operating model
• Available participation options:
  • Send-Only​
  • Receive-Only (specific to the bank-affiliated with the trust company)
  • 100% Reciprocal​
  • Reciprocal Plus and Reciprocal Minus (specific to the bank-affiliated with the trust company)

Independent Trust Company & State Chartered Trust Company Relationship

• An Independent Trust Company not affiliated with a Bank
• Indirect-Source (through the DDM-Indirect-Source-Through-Custodian Bank operating model)
• Available participation options:
  • Source Institution (Send-Only)

Traditional Credit Union​ Relationship

• Direct-Source operating model
• Available participation options:
  • Send-Only​
  • Receive-Only​³
  • 100% Reciprocal​⁴
  • Reciprocal Plus and Reciprocal Minus ⁴

Broker Dealer Relationship

• Indirect-Source operating model
• Available participation options:
  • 100% Reciprocal (through the DDM-Indirect-Source-Sweep operating model)
  • Reciprocal Plus and Reciprocal Minus (through the DDM-Indirect-Source-Sweep model)

Banking as a Service (BaaS) Relationship

• Direct-Source operating model
• Available participation options:
  • Send-Only
  • 100% Reciprocal
  • Reciprocal Plus and Reciprocal Minus

Processing Models

The DDM Program offers several processing models that determine how a participating institution's customer information is handled, how transactions are reported, and how institutions interact with the network. These models support different operational and privacy requirements. Each processing model includes specific automation capabilities, reporting features, and Deposit Insurance access limits, which influences how an institution configures its participation in the DDM Program. The comparison below outlines the key characteristics of Fully Disclosed, Masked, and IDEA Feature

^{*Available only if offered through the institution's core processor.}

Processing Methods

The DDM Program supports two processing methods: Automated and Manual, each determining how Participating Institutions (and their Servicers) connect and exchange data with the network.

Automated Data Sets

Participating Institutions (or their Servicers) can exchange data with R&T through automated file transmissions or APIs.

Manual (DDM Lite)

Participating Institutions (or their Servicers) can submit required information through the CAP Portal and manual processes instead of data sets.

What's Next

• Learn more about participating in the Direct-Source Model of the DDM Program.
• Learn more about participating in the Indirect-Source Model of the DDM Program.
• Understand more about DDM's operating models from the various Operating Model Use Cases.
• Explore the various Participation Options offered in the DDM Program.

1 The DDM Program is a deposit network program administered by R&T.

2 Under the DDM Program, funds are deposited into DDAs or MMDAs at Receiving Institutions. Where funds are held in MMDAs, the return of those funds from the DDM Program may be delayed as, under federal regulations, the Receiving Institution is permitted to impose a delay of up to seven days on any withdrawal request from an MMDA.

3 Only credit unions that are designated as a LICU can receive funds under the DDM Program as a Receive-Only or Reciprocal institution.

4 If a credit union is acting as a Reciprocal, Reciprocal-Plus or Reciprocal-Minus institution, regulatory benefits from the reciprocal deposit exception under 12 CFR 337 (applicable to banks) would not apply to the credit union.