ICS Reciprocal

What is ICS Reciprocal?

Using ICS®, the Insured Cash Sweep® service, Promontory Network members can offer customers access to multi-million-dollar FDIC insurance and a return on funds placed in demand deposit accounts, money market deposit accounts, or both. With ICS Reciprocal, banks receive matching deposits – that is, funds are exchanged on a dollar-for-dollar basis so that each bank comes out whole. As a result, the full amount of a customer’s deposit can be available for lending in the local community. (Not looking to keep funds on balance sheet? Then, please see the ICS® One-Way Sell® option, which enables banks to sell excess ICS deposits for fee income.)

Did you know most reciprocal deposits are nonbrokered?

A new law, the Economic Growth, Regulatory Relief, and Consumer Protection Act, provides that most reciprocal deposits will no longer be treated as brokered deposits. Now banks have an even greater opportunity to use reciprocal deposits to grow high-value relationships and franchise value. (Read why the new law is a game changer for banks and communities.)

Why would your bank want to use ICS Reciprocal?

ICS Reciprocal transactions provide your bank with a way to use ICS to obtain cost-effective funding. By keeping the full amount of funding on balance sheet, ICS Reciprocal enables your bank to:

  • Provide customers with easy and convenient access to multi-million-dollar FDIC insurance and a return for funds placed into demand deposit accounts, money market deposit accounts, or both.
  • Easily replace more cumbersome and expensive funding options (e.g., repo sweeps and letters of credit) so its existing relationships are more profitable. 
  • Cost-effectively attract new, multi-million-dollar customers.
  • Increase asset liquidity.
  • Lower the risk of collateral-value deterioration.

How does ICS Reciprocal work?

Banks that offer ICS are members of the Promontory Network. When banks place funds through ICS, the deposit is sent from a transaction account at a member bank into deposit accounts at other FDIC-insured member banks. The bank receives matching deposits in return. By working directly with just one bank, a depositor can access FDIC coverage from many. And banks set the interest rate and maintain ownership of the customer relationship (customer information is not shared with other participating institutions).
Reciprocal Graphic Explainaiton

What else do I need to know?

Customers like ICS because it lets them work directly with just one bank for security, convenience, and other benefits. With all ICS transactions, the customer’s confidential information remains protected.

If a depositor is subject to restrictions with respect to the placement of funds in depository institutions, it is the responsibility of the depositor to determine whether the placement of the depositor’s funds through ICS, or a particular ICS transaction, satisfies those restrictions.

Placement of customer funds through the ICS service is subject to the terms, conditions, and disclosures set forth in the agreements, including the ICS Deposit Placement Agreement, that a participating institution's customer enters into with that institution. Limits and customer eligibility criteria apply. Program withdrawals are limited to six per month when using the ICS savings option. ICS, Insured Cash Sweep, and One-Way Sell are registered service marks of Promontory Interfinancial Network, LLC