Using Floating Rates

NBID supports a range of indices for institutions to seamlessly manage account interest rates in line with market and custom institution-defined benchmarks.

Creating a floating rate structure is flexible and straightforward. To set a floating interest rate against an index, select Floating Rate from the Rate Structure dropdown, then choose to select from either Market or Custom Indices. You will be prompted to fill in three fields, corresponding to the following rate formula:

(Index Rate x Percentage) + Spread = Rate Earned.

• Index Rate: Select from a dropdown of available indices
• Percentage: The desired percentage of the index rate that you would like the account's rate to track against
• Spread: The fixed spread applied to the percentage-adjusted index

Currently, NBID supports the following Index Rates:

• Median EFFR (Effective Federal Funds Rate)
• Federal Funds Target - Upper and Lower Limits
• CME SOFR 3, 6, 9, and 12 month
• WSJ Prime Rate
• Custom Rate Indices

Additional indices, including 3-month CMT and Fidelity money market fund yields are in-process and should be available for use soon.

To set a custom index, click the Manage Program button and select Add Custom Index. After providing the name, description, and rate, this custom index will be available to select from the Custom Indices dropdown. Each of these fields can be managed in the Custom Indices tab by hovering over the index in question and selecting the Edit button; any changes made to will flow through to accounts tied to the index. Indices can also be deleted, but only when there are no active associated accounts.

Index rates are displayed and calculated as nominal interest rates, and update daily in-line with the release of the prior day’s data.

If there are additional indices you would like to be tracked, or if you have any questions on floating rates, please reach out to your Regional Director or to [email protected].