Ameriprise 2011 Annual Report Download - page 147

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12. Customer Deposits
Customer deposits consisted of the following:
December 31,
2011 2010
(in millions)
Fixed rate certificates $ 2,004 $ 2,313
Stock market certificates 731 790
Stock market embedded derivative reserve 6 14
Other 36 43
Less: accrued interest classified in other liabilities (5) (19)
Total investment certificate reserves 2,772 3,141
Brokerage deposits 2,341 2,116
Banking deposits 4,737 3,522
Total $ 9,850 $ 8,779
Investment Certificates
The Company offers fixed rate investment certificates primarily in amounts ranging from $1,000 to $1 million with interest
crediting rate terms ranging from six to 36 months. Investment certificates may be purchased either with a lump sum
payment or installment payments. Certificate product owners are entitled to receive, at maturity, a definite sum of money.
Payments from certificate owners are credited to investment certificate reserves. Investment certificate reserves generally
accumulate interest at specified percentage rates. Reserves are maintained for advance payments made by certificate
owners, accrued interest thereon and for additional credits in excess of minimum guaranteed rates and accrued interest
thereon. On certificates allowing for the deduction of a surrender charge, the cash surrender values may be less than
accumulated investment certificate reserves prior to maturity dates. Cash surrender values on certificates allowing for no
surrender charge are equal to certificate reserves. The Company generally invests the proceeds from investment certificates
in fixed and variable rate securities. The Company may hedge the interest rate risks under these obligations with derivative
instruments. As of December 31, 2011 and 2010, there were no outstanding derivatives to hedge these interest rate
risks.
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 52-week 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% to 3%. The equity component of these certificates is considered an
embedded derivative and is accounted for separately. See Note 15 for additional information about derivative instruments
used to economically hedge the equity price risk related to the Company’s stock market certificates.
Brokerage Deposits
Brokerage deposits are amounts payable to brokerage 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.
Banking Deposits
Banking deposits primarily include customer deposits in money market, savings and checking accounts and certificates of
deposit held at Ameriprise Bank. The Company pays interest on certain customer balances and the interest is included in
banking and deposit interest expense.
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