Institutions
Frequently Asked
Questions
Explore how the ModernFi deposit network works by connecting financial institutions with one another.
Learn about the benefits, operations, and compliance standards that make ModernFi a strategic partner
for enhancing balance sheet health and profitability.
ModernFi is a platform that provides innovative deposit solutions for credit unions and banks. Its deposit network connects financial institutions seeking to sweep deposits with those needing liquidity. By leveraging ModernFi’s robust integrations, institutions can attract large-value depositors through seamless access to extended deposit insurance and manage their deposits more effectively.
The ModernFi deposit network allows institutions to optimize their liquidity by sourcing funding on demand and sweeping excess liquidity to enhance balance sheet health and improve net interest margin. Additionally, it provides a user-friendly portal for end-to-end program management, enabling seamless execution and order management. This comprehensive approach helps financial institutions manage their balance sheets, deposit programs, and accounts more strategically and efficiently, ultimately supporting growth and profitability.
Working with ModernFi offers numerous benefits for credit unions and banks. ModernFi helps attract large-value depositors with seamless access to extended deposit insurance, while also retaining key accounts by strengthening relationships, trust, and security. By optimizing liquidity through demand-sourced funding and sweeping excess liquidity, institutions can enhance their balance sheet health and improve net interest margin. The user-friendly portal and robust integrations enable seamless execution and order management, reducing operational burdens and simplifying management of balance sheets, deposit programs, and accounts.
Additionally, ModernFi provides cost-effective funding solutions with access to stable, diversified, low-cost deposits on demand, supporting profitable lending and investment decisions. The Term Funding software facilitates efficient funding for growth and balance sheet management. With extended insurance and simplified operations, ModernFi ensures that financial institutions can compete with larger competitors and manage their deposits more effectively. Partnering with ModernFi ultimately supports growth and profitability through a seamless, efficient, and strategic approach to managing deposits and liquidity.
The ModernFi deposit network seamlessly connects financial institutions with excess deposits to those seeking additional funding. Source Institutions determine their target sweep balance, while Receiving Institutions set their order amount and rate through the ModernFi Admin Portal. Reciprocating Institutions set amounts to sweep and receive. Receiving Institutions set and pay rates, while Source Institutions earn the weighted average rate from the network. Institutions can monitor balances and make changes through the portal by 2 PM ET. After this, the rebalancer runs and ModernFi allocates funds to participating institutions via our custodian bank. For detailed operational processes, connect with ModernFi relationship managers.
ModernFi exclusively partners with US-based, FDIC-insured or NCUA-insured institutions, ensuring outstanding creditworthiness and top overall health. We closely monitor capital adequacy, asset quality, earnings, liquidity, and rate sensitivity. Additionally, all partners maintain compliant AML and customer identification programs. ModernFi collects and reviews necessary information during onboarding and at regular intervals, and programmatically monitors accounts for suspicious activity. For more details, connect with our relationship managers about our AML program.
ModernFi supports all deposit account types, including accounts holding funds for commercial entities, public funds and municipalities, non-profits, trusts, and individual / joint depositors.
Source Institutions that sweep deposits into the network and their end depositors may exclude specific financial institutions from receiving their deposits. ModernFi will honor exclusion requests promptly after being notified.
ModernFi is built on compliance, regulatory respect, and disciplined operations. We adhere to OCC, FDIC, and Federal Reserve guidance for risk management in third-party relationships. Our operational resilience is reinforced through our partnership with Northern Trust, a major financial institution, as our qualified custodian for holding and transferring deposits. ModernFi is SOC 2 Type 2 certified, ensuring strict standards for data protection, information security, and identity & access management. For detailed information, connect with our relationship managers who will walk you through our third party diligence materials.
Deposits placed through the ModernFi Program are eligible for extended FDIC or NCUA insurance from receiving financial institutions. The FDIC and NCUA insure deposits up to $250,000 per depositor per institution. By allocating deposits to multiple institutions, depositors can receive coverage that multiplies the standard $250,000 limit.
Depositors benefit from pass-through FDIC or NCUA insurance from Receiving Institutions, meaning insurance coverage extends through the custodian and sweeping institution to the original depositor. This insurance protects against the loss of deposits up to $250,000 per institution, backed by the full faith and credit of the United States. In case of a receiving institution's failure, ModernFi will submit an insurance claim on behalf of affected depositors.
ModernFi, its custodian, and participating institutions do not monitor balances outside the Program. Please refer to the relevant disclosures for more details. Note that ModernFi is not a financial institution.