What is the CODI Index?
A. CODI – Certificate of Deposit Index. A CODI loan is based on one of the most stable indexes currently available. Simply put, it is the aggregate sum of what banks are paying to their depositors on their 3-month CD accounts! As we all know, these short-term CDs generally offer a very low rate of return. Currently, the average rate paid by a bank on a 3-month CD is approximately 1.40%. The overall index is calculated by using an average, of an average, of an average. It works this way: they take the daily average of these 3-month CDs and add those daily values together for one month. They then divide that sum by the number of days in the month to reach a monthly value. Next, they add that current monthly value to the previous 11 monthly values and divide by 12 to give us the current CODI Index.
