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Certificate of Deposit Index (CODI)

Certificate of Deposit Index (CODI)

What Was the Certificate of Deposit Index (CODI)?

The certificate of deposit index (CODI), otherwise called the cost of deposit index, was the year average of the most recently distributed dealer bid rates (yields) on nationally traded three-month certificates of deposit as reported in the H.15 Federal Reserve Statistical Release. The yields were annualized utilizing a 360-day year.

The CODI was distributed is distributed and made accessible to the public by the Federal Reserve Board. The index was calculated on or close to the main Monday of each calendar month and is frequently utilized for setting adjustable-rate mortgages.

On Dec. 5, 2013, the Federal Reserve announced the discontinuance of distributed rates for 1-, 3-, and half year CDs, which effectively ended the CODI index.

Understanding the Certificate of Deposit Index

Since the CODI index was a year moving average, it was not quite as unstable as some other famous mortgage indexes like the one-month London Interbank Offered Rate (LIBOR) index. It likewise tended to lag other mortgage indexes in the rate at which it changes when interest rates change.

A few mortgages, like payment option ARMs, offer the borrower a selection of indexes. This decision ought to be made with some analysis. The interest rate on an adjustable-rate mortgage is known as the completely indexed interest rate - it equals the index value plus the margin. While the index is variable, the margin is fixed for the life of the mortgage. While thinking about which index is generally prudent, remember about the margin. The lower an index is relative to another index, the higher the margin is probably going to be.

ARM Index Choices

Some common ARM indexes incorporate the prime lending rate, the one-year steady maturity treasury (CMT) value, the one-month, the Fed Funds Rate, and the MTA index, which is a year moving average of the one-year CMT index. To ascertain your adjustable mortgage rate the formula is Index + Margin = Your Interest Rate.

The index that an adjustable-rate mortgage is tied to is an important factor in the decision of a mortgage. For instance, on the off chance that a borrower accepts that interest rates will rise from now on, the MTA index would be a more practical decision than the one-month LIBOR index on the grounds that the moving average calculation of the MTA index makes a lag effect.

The lender picks which rate your mortgage is tied to, yet you have a selection of lenders and definitely, ought to consider the rate that every lender utilizes. A couple of lenders even utilize their own cost of funds as an index, instead of utilizing different indexes. It's wise to ask the lender where this rate is distributed and the way things are calculated so you can compare its movement to other common indexes.


  • Distributed by the Federal Reserve, the CODI was utilized to reference different adjustable-rate loans, for example, ARM mortgages.
  • The CODI was discontinued in December 2013 after the Fed stopped distributing short-term CD rates.
  • The certificate of deposit index (CODI) was an official benchmark of 3-month CD rates in the U.S.