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Daily Settlement Cycle

The DDM Program operates each business day in accordance with the Federal Reserve Bank holiday calendar. DDM Program activity follows a defined operational cycle that includes data transmission, automated allocation, and financial settlement. This controlled process facilitates the timely movement of funds across the network while ensuring compliance with regulatory requirements and the maintenance of expanded deposit insurance coverage access for customers.

Daily Settlement Cycle Process

The process follows a sequence of events divided into three primary phases. Accuracy in this cycle is required to ensure proper placement and interest accrual.

Data Intake and Validation

The daily settlement cycle supports two allocation windows:

  • First Allocation Window

    • Data Intake & Validation Cut-Off: 12:15 PM ET
    • Settlement Cut-Off: 12:30 PM ET

  • Second Allocation Window

    • Data Intake & Validation Cut-Off: 3:15 PM ET
    • Settlement Cut-Off: 3:30 PM ET

Transaction details must be received and validated prior to the applicable cut-off time to be included in the corresponding allocation and settlement cycle.

Allocation

Once the data is locked, the R&T allocation engine executes the DDM Program's Allocation Process.

  • Logic Application: The allocation engine determines the destination for balances sent into the DDM Program.

  • Insurance Optimization: The system ensures no individual customer balance exceeds the SMDIA ($250,000 per eligible depositor (e.g., based on Customer Identifier), per account ownership category, per insured institution) limit at any single Receiving Institution (other than any Excess Funds which are placed at Excess Institutions).

If a Sending Institution permits a Customer to place any funds into the DDM Program in excess of the relevant Sending Institution’s Program Limit, such excess funds (Excess Funds) are deposited into accounts at one or more Receiving Institutions (Excess Institutions) and those Excess Funds are not eligible for access to Deposit Insurance coverage. Under the DDM Program, any Receiving Institution in the Sending Institution’s DDM Program offered to its Customer (other than a Receiving Institution that the Customer has Opted-Out of) can serve as an Excess Institution to receive the Customer’s Excess Funds.

Output Generation: After the allocation process completes, transfer instructions are generated and made available.

Settlement

Settlement processing occurs following each allocation window. After the allocation is finalized, physical cash moves through the banking system via the designated Settlement Bank.

Settlement processing varies based on the Participating Institution's participation option.

Send-only Settlement (Daily Processing)

Once the Participating Institution receives and reviews the net settlement notice, funds should be wired to the Settlement Bank.

  1. The Account Registration and Transaction files (or if processing manually, account creation and transaction entry via CAP) are transmitted to R&T. All details must be received before one of the two cutoff times: 12:30PM ET or 3:15PM ET.

  2. R&T processes the Account Registration and Transaction details.

  3. After the Account Registration and Transaction details are processed, the DDM Program Net Settlement Report is immediately made available via email and on CAP. The report reflects the net sum of all transactions posted, resulting in either a net deposit to DDM Program or a net withdrawal from DDM Program.

  4. The Participating Institution reviews the amount on the Net Settlement Report. If you agree with the amount, no action is required. If you do not agree with the amount, you should contact DDM Program Operations immediately by emailing [email protected] or phone (800) 696-5547 to reconcile.

  5. After all files (or forms) from all DDM Program institutions have been processed and net activity confirmed, the DDM Program Allocation process is run. The allocation process determines the placement of your customers’ funds across the network of the DDM Program Receiving Institutions.

    • If the net activity is a Deposit into DDM Program, upon review of the Net Settlement Report, the Participating Institution must wire the funds from their internal settlement account to the DDM Program’s Settlement Bank. Wire instructions to send the funds to the Settlement Bank are provided during implementation.

    • If the net activity is a Withdrawal from DDM Program, the Participating Institution receives a wire from the Settlement Bank, after it receives the funds from the Receiving Institution(s) holding the deposits.

Send-Only Settlement (Monthly Processing)

  • On the last business day of the month, interest is credit to the Program Account at the Receiving Institution.

  • On the first business day after month-end, all supplemental (shortfall) and any prefunded interest will be settled with that day’s net transactions.

Reciprocal Settlement

After the allocation is finalized, the Participating Institution receives a Transfer Instruction notice advising them to transfer funds between their internal settlement account and the Program Account at their institution (in the name of Stable Custody Group II LLC, as agent).

Post-Settlement Process

After the final allocation is run and all settlement is completed, the system runs the end of day (EOD) processes to finalize the day's activity.

Daily Accrual Calculation

The system calculates interest based on the settled balances. Customers earn interest calculated using a simple interest accrual methodology, credited monthly. The interest cycle ends on the last calendar day of every month and does not include any non-business days that follow it. For example, if the month has 30 days and the 29th is a Friday, interest will accrue thru Saturday the 30th and be posted. The new interest cycle will begin on Sunday the 1st.

What's Next

  • Review Data Exchange & File Options to see the account registration and transaction files required to trigger the daily settlement cycle.

  • Understand the role of the Settlement Bank and how it facilitates the movement of funds between Participating and Receiving Institutions.

  • See the DDM Cut-Off Times for a condensed view of daily deadlines.

Updated 13 days ago

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R&T Deposit Networks, LLC, R&T Deposit Marketplace, LLC, R&T Deposit Solutions, LLC and R&T Deposit Programs, LLC (each d/b/a R&T Deposit Solutions), each a Delaware limited liability company, (together, “R&T”) provide administrative, recordkeeping, and/or other services to banks, credit unions, trust companies, wealth management firms, broker-dealers and other institutions with respect to deposit placement and sweep programs, including the Demand Deposit Marketplace® (DDM®), Certificate of Deposit Marketplace Exchange℠ (CDMX℠) and R&T Insured Deposits℠ (RTID®) programs, as well as other services. An affiliate of R&T, Stable Custody Group II LLC (“Stable”), acts as agent of participating sending institutions under the DDM and CDMX programs. R&T and Stable, together, “we”, “us” or “our”. All of our services are provided subject to the terms and conditions of the written agreements and/or agency appointments between us and our clients with respect to those services, and we provide no representations or warranties, express or implied, except as expressly set forth in those written agreements and/or appointments. Click here for our legal and other disclosures. We are not an FDIC or NCUA-insured institution. FDIC insurance only covers the failure of an FDIC-insured institution. NCUA insurance only covers the failure of an NCUA-insured institution. Certain conditions must be satisfied for FDIC and NCUA pass-through deposit insurance coverage to apply. Click here for a list of the FDIC and NCUA-insured institutions with which R&T has a direct or indirect business relationship for the placement of deposits under the DDM, CDMX, and RTID programs, and into which a participating institution may place deposits (subject to the terms of those programs and any opt-outs by the participating institution and/or its customers). While the DDM, CDMX, and RTID programs provide access to an expanded level of FDIC or NCUA deposit insurance coverage on funds placed into the programs (subject to program terms and applicable laws, regulations and guidance, including pass-through insurance coverage requirements), the DDM, CDMX and RTID programs, themselves, as well as our other service offerings, are not insured or guaranteed by the FDIC or NCUA, are not deposits, and may lose value. We are not an affiliate of an FDIC or NCUA-insured institution, we are not an office, division, or sub-division of the FDIC or NCUA, and we are not associated with the FDIC or NCUA or office, division, or sub-division thereof. The primary objective of the DDM, CDMX, and RTID programs is to provide customers with convenient access to expanded deposit insurance coverage on their funds (and not for investment enhancements, higher rates of returns or profits). R&T®, Reich & Tang®, Demand Deposit Marketplace®, DDM®, DepositView®, CDMX®, and RTID® are registered marks, and R&T Direct℠ is a pending mark of R&T Deposit Networks, LLC. of R&T Deposit Networks, LLC. IDEA℠, Certificate of Deposit Marketplace Exchange℠, R&T Insured Deposits℠ are unregistered service marks of R&T Deposit Networks, LLC.

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