SimpliCD - FAQs

(800) 470-3444, Ext. 264

Frequently Asked Questions

"What is SimpliCD and who is Primary Financial?"
SimpliCD is an investment product being offered through Volunteer Corporate Credit Union. It enables credit unions to invest substantial funds in federally-insured certificates of deposit. Primary Financial, LLC is the CUSO owned by Volunteer Corporate Credit Union and more than two dozen other corporate credit unions that serves as custodian and administers the SimpliCD program.

"How is the SimpliCD Program through VolCorp better
than programs offered through other brokers?"
With SimpliCD, your participation can be as limited or as extensive as you like. There are no minimum purchase requirements and no co-agent fees or finder's fees. The competitive rates that you receive from Primary Financial are "net to you" - in other words, the rate quoted is the rate received. Volunteer Corporate can complement your existing investment strategies and illustrate the potential that our SimpliCD service has to offer.

"I have a substantial amount of surplus funds to invest in CDs. Will you be able to place it all and still keep my funds 100% insured?"
Yes. By placing no more than $100,000 per issuing institution, SimpliCD can invest large amounts and still maintain fully insured protection for your principal. Due to our extensive number of strong issuer relationships, Volunteer Corporate's SimpliCD product can provide numerous investment opportunities without exceeding federal insurance coverage or your potential for fully insured investing. NOTE: An On-Own List contains CDs owned by the investor outside of those purchased through SimpliCD. If CDs are held outside the SimpliCD program, SimpliCD should be made aware of those holdings to reduce potential duplication.

I think I can get better rates from another source. How can SimpliCD beat those rates?
Published rates are not always equal to the rate of return you actually receive on your investments. Many times, brokers may offer what appear to be highly competitive rates, but, there are hidden costs. Hidden costs include broker fees, wire in and out fees, and time allotted to collecting checks, filling out paperwork, and tracking the investments reduce the rate before they reach your bottom line. With SimpliCD, the rate you are quoted is the rate you get with no hidden costs or fees. In addition, by participating in the program, you receive top quality investment services and a variety of statements that ease your monthly accounting as well as your compliance with NCUA Part 703 reporting requirements.

"How do I know that your Issuers are solid institutions?"
With SimpliCD, you not only profit from the competitive rates that our participating issuers offer, but you are assured of the integrity of the issuing institutions. We work only with issuers that have been categorized as "well-capitalized" by the FDIC or that are considered "adequately capitalized" and that have received special permission to accept brokered deposits by the FDIC. In addition, at the time of purchase, we offer a performance review of the issuing institution complete with a variety of information relating to the safety and soundness, including summary financial statements and comparative ratio analysis. Primary Financial provides the institution's Veribanc Color & Star rating and their estimated CAMEL rating, both based on the institution's profitability, capital adequacy, asset size and loan quality.

"Are CD investments risky?"
All investments have some degree of risk. The primary risk associated with CDs is issuer default. However, a credit union can minimize its exposure by limiting total deposits at any one issuer to a maximum of $100,000. All CDs offered through SimpliCD must be insured up to $100,000. On-going monitoring of your portfolio assures that the $100,000 limit per institution is not exceeded.

"I am a large credit union that usually buys government agencies in denominations of $500,000 and $1,000,000. How can SimpliCD assist me?"
With SimpliCD, purchases can be made in large block increments for one maturity. A net rate is provided for the total amount to be invested with no more than $100,000 per issuing institution. The interest will be included with the entire portfolio and sent to the investor in one interest payment at month end. All placement and interest collection functions are performed by the staff at Primary Financial. Depending on the yield environment, block placements can offer significant advantages over agencies and government securities. The convenience and monthly cash flows make SimpliCD an attractive alternative for larger credit unions' investment portfolios.

The custodian for SimpliCD is Primary Financial Company, LLC,
a credit union service organization (CUSO) owned jointly by
corporate credit unions throughout the U.S.