Mortgages Analyzed
Cost of Deposit Index (CODI)

CODI Values

For the Year:  

What is Cost of Deposit Index?

CODI Rates

Cost of Deposit Index (CODI) is the twelve month moving average of the monthly values of the 3-month certificate of deposit (CDs secondary market) rates. Due to lack of data, the 3-month CD rates are no longer published by Federal Reserve and as a result the CODI index is no longer available. The last available CODI value is for June 2013 when the value was 0.2292%.


CODI Rates: Time Series


Cost of Deposit Index Has Been Discontinued

On Dec 5, 2013, Federal Reserve announced that that it will no longer be publishing 3-month CD rate, which formally ended the CODI index. In its announcement, the Federal Reserve stated that the number and type of institutions that provide the quotes have reduced and the available information does not allow constructing a statistically robust estimate of CD rates. There seems to be no indication of resuming publication of 3-month CD rates in the future.

Federal Reserve’s December 5, 2013 announcement1

"Discontinuance of CD rates (secondary market): As of the release on December 16, 2013, the H.15 will cease publication of the 1-month, 3-month, and 6-month CD rates. Recent attrition has reduced both the number and types of institutions that provide quotes creating a challenge to construct statistically robust estimates of CD rates, and it is not feasible to resume publication. The historical rates will remain available through the Federal Reserve Board's Data Download Program (DDP)."

This announcement came after 5 months of lack of data. The 3-month CD rates had been unavailable since July 2013. On July 2, 2013, the Federal Reserve announced "Rates for "CDs (secondary market)" are not reported (and "n.a." is shown) when the number of respondents is too few to be representative. Footnote seven has been updated to reflect this." June 2013 was the last published value of CODI.


Steps to Address End of CODI


Any lender or servicer that has an ARM indexed to CODI must find a suitable replacement index for the loans.


You should have received a letter from the servicer whether it states the new index used as a replacement for CODI. If you have not received then contact your servicer and inquire about the new index. Once the new index has been identified, manually check the values of the new index and the interest rate to verify that the servicer applied correctly calculated the interest rate for your loan.

How is Cost of Deposit Index Calculated?

CODI index is based on the 3-month CD (monthly) values that were published by the Federal Reserve on their website as part of the H.15 Selected Interest Rate publication. The CD yields released by the Federal Reserve were yields that were annualized using a 360-day year. The CODI index was calculated on or near the first Monday of each calendar month and was often used for adjustable rate mortgages.


Use of CODI in Mortgages

CODI was used as an index to adjust interest rate on adjustable rate mortgages. CODI is a 12 month moving average index which smoothens out the movements in interest rates. This made it an attractive option in the periods of frequent rate movements. It was also ideal when the interest rates are low but are expected to rise since in that case the index will lag the general movements in market interest rates. However, since CODI is no longer available, it cannot be used as an index for existing or new mortgage loans.

External Links

  1. Federal Reserve, Announcements for Selected Interest Rates (H.15)

Updated: Jan 07, 2014


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