CDARS® One-Way Buy®
What is CDARS One-Way Buy?
CDARS One-Way Buy is an easy way to purchase cost-effective, fixed-rate funding over short or long terms without collateralization or stock purchase requirements.
Why would your bank want to use CDARS One-Way Buy?
- Diversification. One-Way Buy transactions can help your bank obtain large blocks of funding and diversify its wholesale funding options. Expanding your bank’s ability to access fixed-rate funding may help it to better manage interest rate risk and mitigate margin compression. And, varying funding sources may help your bank avoid becoming over-reliant on any single source of funding.
- Control. Your bank controls the pricing. Bid an “all-in rate” and pay no transaction fees.
- Flexibility. Funds are available in a range of maturities (4 weeks, 13 weeks, 26 weeks, 52 weeks, 2 years, 3 years, and 5 years) - the same terms offered for CDARS customer orders.
- Ease. No credit lines, collateralization, or stock purchases are required.
- Convenience. The process is simple. Just log on to the Promontory Transaction and Reporting Portal and enter a One-Way Buy request for funds. You can place a request at any time up until 1:00 PM ET on Match Day (currently Wednesday). Learn the auction results that evening, and settle the next business day – so that funds are available to you within 24 hours.
How do CDARS One-Way Buy transactions work?
Promontory makes available terms and a range of prospective bid rates, based on historical data and comparable market benchmarks, via email the day before Match Day. On each Match Day, Promontory allocates deposits (funding) to Network members that request funds.