The Insured Network Deposits (IND) service is a deposit sweep service for broker-dealers and other custodians of funds. Using the service, broker-dealers automatically transfer, or “sweep,” unused cash balances from customer brokerage accounts to interest-bearing deposit accounts at banks insured by the Federal Deposit Insurance Corporation (FDIC) and savings associations. The banks may be affiliated or unaffiliated with the broker-dealer.
By sweeping funds to multiple banks, broker-dealers that use the IND service offer their customers access to FDIC insurance at multiple banks and, therefore, in larger amounts than the standard FDIC insurance limit for any one bank. Use of a deposit sweep service is an alternative to sweeping funds to money market mutual funds, which are not FDIC insured. This service also provides relatively stable floating-rate funding to banks and savings associations.
The IND service is provided by Promontory Interfinancial Network, LLC. In addition to IND, the company offers the Certificate of Deposit Account Registry Service or CDARS service and the Insured Cash Sweep or ICS service. CDARS enables financial institutions to provide access to FDIC insurance on certificates of deposit, and ICS allows financial institutions to provide access to FDIC insurance on balances in money market deposit accounts, both in multiple millions of dollars. Promontory Interfinancial Network was founded in 2002 and is based in Arlington, Virginia.