Setting EIA Target Balance

Automating a Target Balance for Member Extended Insurance Accounts

ModernFi strives to provide credit union partners with maximum flexibility for structuring member accounts within the deposit network. A common point of inquiry is whether a $250,000 balance must be maintained in the member’s share account to participate. This minimum balance requirement is ultimately up to the credit union team to decide, and fully configurable on the credit union’s core and/or via SFTP.

For guidance on how to automate these sweep and target balances for your member Extended Insurance Accounts, please refer to the ModernFi Configuration Guide specific to your coreprovided by ModernFi, as well as the SFTP Configuration Guide here. If your core manager has any questions after reviewing this documentation, your ModernFi Account Manager is happy to set up time to provide further direction and support.

When setting up Extended Insurance Accounts with target balances, partners typically choose from the following structures:

Zero-Balance Sweep Accounts

In this setup, any member funds that are placed in an Extended Insurance Account (EIA) are automatically swept into the network daily (on days the allocation is run), bringing the EIA balance back to zero. This approach enables our partner credit unions' members to easily define what balances they want allocated throughout the network. Generally, this ZBA approach will also require a Linked Operating Account or Companion DDA for the member’s day-to-day cash management needs. These Linked Operating Accounts are usually defined as part of the standard Terms & Conditions members agree to in the Account Agreements as they open their EIA.

Peg (Target) Balance Accounts

Some credit unions prefer to retain a specified balance on their books in the EIA for day-to-day cash management needs. This peg balance is usually set at $250,000 in the member’s EIA to maximize insurance coverage and immediately available liquidity. This means that if the member’s EIA balance goes above $250k, the credit union’s system will automatically trigger a daily sweep to allocate those funds throughout the network. If the member withdraws funds from their EIA (e.g., by writing a check), then the credit union’s system will automatically request those funds back from the network. ModernFi will only satisfy withdrawal requests for funds that are currently allocated in the network. This structure preserves a consistent balance is readily available for the member’s day-to-day cash management needs, while still offering additional security on funds above the target.