Introducing the New Raymond James Bank Deposit Program
Keeping your cash safe while earning a competitive interest rate has never been more important.Starting in September 2009, Raymond James will use a multibank program to transfer, or “sweep,” available cash balances in your brokerage account. This will allow for greater FDIC insurance coverage as well as the availability of more competitive interest rates.
Under the Raymond James Bank Deposit Program (RJBDP), available cash in you brokerage account will be deposited into interest-bearing deposit accounts at one or more banks set forth on a predetermined priority list. If your cash balance exceeds the limit for guaranteed FDIC insurance for all funds at the first bank on the list, the excess cash will be deposited in the next bank. If you still have excess cash, those funds will be deposited in the third bank Raymond James has designated. This process continues through all banks on the priority list, providing FDIC coverage up to $2.5 million, or $5 million for joint accounts. As always, you have immediate access to you RJBDP funds should you wish to withdraw or reinvest them.
Frequently Asked Questions
Bank Priority List
What is the bank priority list and how is it determined?
There are actually multiple bank priority lists, which provide the order in which client funds will flow. All consist of the same banks, but the order may be different based on Raymond James’ contracts with the banks and client assets in particular regions. Your priority list is based on your legal address and which region your state is in. The most up-to-date bank priority lists can always be found at www.RaymondJames.com/RJBDP.
Where can I see my bank priority list?
The state used to determine a client’s bank priority list is displayed on brokerage account statements in the Cash and Cash Equivalents section. The most up-to-date bank priority lists can always be found at www.RaymondJames.com/RJBDP.
When will the bank priority lists be available?
The bank priority lists are updated periodically and can be found at www.RaymondJames.com/RJBDP.
Why has my bank priority list changed?
There are two primary reasons your bank priority list may change.
1. You moved or otherwise changed your legal address, which is the basis for the state designation that determines which list applies.
2. Your cash balance activity in that region could have caused a change in the priority list. This is because Raymond James has contractual agreements with the banks to maintain target balances and my reorder the list to manage total balances.
Deposit Thresholds and Coverage
Why is the deposit threshold for each client $245,000 ($490,000 for joint accounts) at each bank, rather than the full $250,000 (or $500,000 for joint accounts)?
Making the threshold lower than the full amount of potential insurance provides a $5,000 to $10,000 “buffer” to allow for accrued interest over the course of the month.
Why are there 15 banks in the list, but coverage is only up to $2.5 million (or $5 million for joint accounts)?
While 11 banks provide the maximum available coverage, the additional banks on the list allow for you to opt out of certain banks with which you may have additional funds outside of the Bank Deposit Program and still benefit from the same coverage. Raymond James will consider adding more banks if the need arises.
If I have cash balances in excess of the $2.5 million (or $5 million for joint accounts), where is the excess cash directed?
Excess cash is swept to one of three pre-determined excess banks in the bank priority list, regardless of FDIC insurance coverage. If the Bank Deposit Program/CIP over $2.5 Million is selected as the sweep option, excess cash will automatically flow to CIP instead.
Opting Out of Certain Banks
Why might I opt out of a bank or choose to exclude a bank from my list?
There are two primary reasons you may choose to opt out of using a particular bank.
1. You already have holdings at that bank (e.g., CD, savings account, checking account) which, when aggregated with Bank Deposit Program funds, would exceed the available FDIC insurance limits.
2. You have multiple accounts at Raymond James that sweep to the Bank Deposit Program. Please contact your financial advisor to discuss your FDIC exposure and to opt out of certain banks.
Will changing my sweep option to the Bank Deposit Program affect my Capital Access account?
No. Changing your sweep option to the Bank Deposit Program will not affect your Capital Access account.
Where can I see which banks I have excluded?
Banks chosen for exclusion will be identified as Participating banks you declined in the Cash and Cash Equivalents section of the brokerage statement.
Interest
How will interest rates be determined?
Interest rates will be determined based upon commitments from the banks on the priority list as well as prevailing economic and business conditions. Raymond James intends for the rates to be higher than rates offered through current sweep program options. Current yields on sweep options may be obtained at www.RaymondJames.com/rates.htm and more information about the program rates will be posted as available. As with the current program, the interest rate paid on deposit accounts will be the same for all clients with account balances of at least $2,500; accounts with balances of less than $2,500 will receive the standard rate less approximately 1.5%, but not below zero.
How is interest calculated?
Interest is compounded daily.
What could cause interest to post in the middle of the month for the Bank Deposit Program?
There are two primary reasons your interest may post in the middle of the month.
1. A change of legal address may cause your bank priority list to change, which could change the order in which funds are deposited at each bank. This change to the new priority among the banks on the priority list could result in a bank account closing and posting interest to your account.
2. Opting out of a bank or choosing to exclude a bank from the priority list while the bank currently holds a cash balance would result in the account being closed; interest to post and the funds being re-allocated to another bank.
Statement vs. Investor Access View
Will Investor Access show where my cash balances are at each bank?
No. Investor Access will show an aggregate of the Bank Deposit Program as a whole. The Cash and Cash Equivalents section of your statement will break down where your cash balances reside within each bank, as of the last business day of the month.
Raymond James & Associates, Inc. and Raymond James Financial Services, Inc. are affiliated with Raymond James Bank, a federally chartered savings bank. Unless otherwise specified, products purchased from or held at Raymond James & Associates or Raymond James Financial Services are not insured by the FDIC, are not deposits or other obligations of Raymond James Bank, are not guaranteed by Raymond James Bank and are subject to investment risks, including possible loss of the principal invested. FDIC deposit insurance was temporarily increased from $100,000 to $250,000 per depositor through December 31, 2013. Coverage applies to total holdings per bank per depositor. Visit www.FDIC.gov for more information.