Letters of Credit help members secure improved credit terms for residential housing finance, facilitate community lending, assist with asset/liability management, and support liquidity needs.

Standby Letters of Credit allow members to provide additional assurances to third parties.  For example, Standby Letters of Credit are often used in place of securities to support public unit deposits, providing members with an attractive alternative to tying up high-quality investment securities.

Another type of Standby Letter of Credit is a Confirming Letter of Credit. A Confirming Letter of Credit or “wrap” is sometimes used in conjunction with a member’s letter of credit.  Members have used this structure to wrap letters of credit provided to trustees to support bond issuances. The FHLBank may also issue a Standby Direct-Pay Letter of Credit directly to the trustee; either way, the letter of credit guarantees investors timely principal and interest payments.

Letters of credit may be issued for terms up to 20 years.

Standby (Including Direct Pay)

Public Unit Deposits




Up to 10 Years

Up to 20 Years

Up to 10 Years

Annual Fee

37.5 bps
$1,000 minimum

20 bps
$500 minimum

12 bps
No minimum

Additional Fees

Additional Fees for change of beneficiary, remarketing draw, or early termination may apply.


Capital requirements

0.10% of the value of the Letter of Credit

Collateral Requirement

Collateral requirement similar to an advance.
Wide menu of potential collateral.


Public Unit Deposit - Letters of Credit

Public Unit Deposit - Letters of Credit Informational Flyer

In order to manage our agreements electronically, FHLBank Indianapolis is utilizing DocuSign (a third-party electronic signature management tool) for certain documents/contracts. The intention is to hasten the process of executing and returning documents without the time and expense associated with routing, executing, and mailing the physical documents. Click here to learn more about our implementation of DocuSign.


For more information or questions about our products, call the FHLBank Indianapolis Advances Desk at 800.442.2568.