Customer Deposits

12 Months Ended

Dec. 31, 2019

Banking and Thrift [Abstract]

Customer deposits [Text Block]

Customer Deposits

Customer deposits consisted of the following:

	December 31,
	2019			2018
	(in millions)
Fixed rate certificates	$	7,032		$	7,377
Stock market certificates	456			476
Stock market embedded derivative	7			6
Other	27			33
Less: accrued interest classified in other liabilities	(21		)	(7		)
Total investment certificate reserves	7,501			7,885
Banking and brokerage deposits	6,929			3,660
Total	$	14,430		$	11,545

Investment Certificates

The Company offers fixed rate investment certificates primarily in amounts ranging from $1,000 to $2 million with interest crediting rate terms ranging from 3 to 48 months. Investment certificates may be purchased either with a lump sum payment or installment payments. Certificate owners are entitled to receive a fixed sum at either maturity or upon demand depending on the type of certificate. Payments from certificate owners are credited to investment certificate reserves, which generally accumulate interest at specified percentage rates. Certain investment certificates allow for a surrender charge on premature surrenders. Reserves for certificates that do not allow for a surrender charge were $2.7 billion as of December 31, 2019. The Company generally invests the proceeds from investment certificates in fixed and variable rate securities.

Certain investment certificate products have returns tied to the performance of equity markets. The Company guarantees the principal for purchasers who hold the certificate for the full term and purchasers may participate in increases in the stock market based on the S&P 500^® Index, up to a maximum return. Purchasers can choose 100% participation in the market index up to the cap or 25% participation plus fixed interest with a combined total up to the cap. Current first term certificates have maximum returns of 2.75% to 13.25%, depending on the term length. The equity component of these certificates is considered an embedded derivative and is accounted for separately. See Note 17 for additional information about derivative instruments used to economically hedge the equity price risk related to the Company’s stock market certificates.

Banking and Brokerage Deposits

Banking and brokerage deposits are amounts due on demand to customers related to free credit balances, funds deposited by customers and funds accruing to customers as a result of trades or contracts. The Company pays interest on certain customer credit balances and the interest is included in banking and deposit interest expense.