Distributed Deposits
Distributed Deposits is HSBC Innovation Banking’s cash sweep solution for the innovation economy. It helps businesses optimize excess cash through automated liquidity management while providing competitive yield opportunities and access to millions in aggregate FDIC insurance across a network of participating banks – all through a single banking relationship.
What is Distributed Deposits?
Businesses use cash sweep solutions for a variety of treasury management needs, including:
- Managing excess operating cash
- Holding proceeds from funding rounds
- Maintaining liquidity for payroll and operating expenses
- Optimizing treasury management while reducing manual cash transfers
For businesses holding cash balances above the standard $250,000 FDIC insurance limit, Distributed Deposits provides access to expanded aggregate FDIC insurance by distributing eligible deposits across a network of participating banks.
Manage your funds placed through Distributed Deposits through HSBCnet, which provides a secure, centralized view of your balances while automating cash management across participating banks.
Maintain liquidity with access to funds when your business needs them, without sacrificing the benefits of automated cash optimization.
How Distributed Deposits works
Distributed Deposits automatically identifies eligible cash in excess of a target balance and sweeps those funds into deposit accounts across participating banks according to established program rules. This automated process helps businesses optimize liquidity and simplify day-to-day treasury management while maintaining access to funds.
Frequently asked questions
What is a cash sweep account?
A cash sweep account automatically transfers excess cash from an operating account into designated deposit accounts based on predefined rules. This helps businesses optimize liquidity while reducing manual cash management.
How does Distributed Deposits work?
Distributed Deposits automatically sweeps eligible excess cash into deposit accounts across a network of participating banks. This helps businesses access additional FDIC insurance coverage while maintaining liquidity and managing funds through a single HSBC Innovation Banking relationship.
Are cash sweep accounts safe?
Cash sweep accounts are designed to help businesses manage excess cash efficiently. Distributed Deposits provides access to FDIC insurance through eligible deposits placed at participating FDIC-insured banks, subject to applicable FDIC rules and program terms.
How often do cash sweeps occur?
Sweep timing depends on the specific program and account configuration. Distributed Deposits automates the movement of eligible funds according to established sweep rules. This is typically one-time at the end of each business day, after all other activity has posted to your account, with settlement occurring on the next business day.
Who can benefit from Distributed Deposits?
Distributed Deposits is designed for businesses that maintain significant cash balances and want to simplify liquidity management, automate treasury operations, and increase access to FDIC insurance coverage through network banks while maintaining full access to their funds.
Can I transact on balances held at network banks?
The Distributed Deposits account permits you to transact using the combined available balances held in your HSBC account as well as funds placed in the network of banks. Should your Distributed Deposits account fall below its target balance as a result of making these payments, a sweep will be triggered at end-of-day to fund your account from your balances held at network banks.
What is a Target Balance and how does it work?
Your Target Balance is the amount you want to keep in your HSBC account after a sweep has taken place. Clients typically set this between $0 and the applicable FDIC insurance limit, but you can choose a higher amount if you’d like to maintain additional funds at HSBC. Funds kept at HSBC and funds swept to the network are both included in your available balance for transacting.
HSBC Bank USA, N.A., Member FDIC provides you with your banking services associated with your Distributed Deposits account. As part of a relationship with IntraFi, IntraFi offers deposit placement services through its network of FDIC insured financial institutions. IntraFi is not a financial institution and is not FDIC insured.
A list identifying IntraFi network banks appears at https://www.intrafi.com/network-banks. Certain conditions must be satisfied for “pass-through” FDIC deposit insurance coverage to apply.
Deposit placement through an IntraFi service is subject to the terms, conditions, and disclosures in applicable agreements. Deposits that are placed through an IntraFi service at FDIC-insured banks in IntraFi’s network are eligible for FDIC deposit insurance coverage at the network banks. The depositor may exclude banks from eligibility to receive its funds. To meet the conditions for pass-through FDIC deposit insurance, deposit accounts at FDIC-insured banks in IntraFi’s network that hold deposits placed using an IntraFi service are titled, and deposit account records are maintained, in accordance with FDIC regulations for pass-through coverage. Although deposits are placed in increments that do not exceed the FDIC standard maximum deposit insurance amount (“SMDIA”) at any one bank, a depositor’s balances at the institution that places deposits may exceed the SMDIA before settlement for deposits or after settlement for withdrawals or be uninsured (if the placing institution is not an insured bank). The depositor must make any necessary arrangements to protect such balances consistent with applicable law and must determine whether placement through an IntraFi service satisfies any restrictions on its deposits. IntraFi and ICS are registered service marks of IntraFi LLC.
HSBC is a member of the HSBC Group of affiliates. In the United States, deposit products including deposits made through the HSBC Innovation Banking division are offered by HSBC Bank USA N.A., Member FDIC. All Rights Reserved.
All United States persons (including entities) are subject to U.S. taxation on their worldwide income and may be subject to tax and other filing obligations with respect to the U.S. and non-U.S. accounts. U.S. persons should consult a tax advisor for more information.
*HSBC reserves the right to change the interest rate at any time and at its sole discretion.
**HSBCnet services are provided in the U.S. by HSBC Bank USA, N.A. (“HSBC”) and all transactions are subject to U.S. sanction regulations. HSBCnet features and functionality vary by country.