Cord blood banking is a kind of insurance for parents who want to protect their child from possible future illnesses by storing the child's cord blood in a cord blood bank. The embryonic stem cells in the cord blood have the power to differentiate. This is a process in which the embryonic stem cells divide and multiply and the new cells created may become many different kinds of cells. This makes embryonic stem cells special and many parents consider their worth when deciding to do cord blood banking or not.

Cord blood banking takes place between the mother of the newborn and the cord blood bank, or storage facility, she chooses. Once the transaction takes place, the cord blood is either owned by the parents (or parent) of the child or the bank, depending on the kind of bank the parent(s) choose for cord blood banking.

Private cord blood banking allows the parents to own the cord blood, and they pay a fee that can be one to two thousand dollars for the storage. Public cord blood banking is essentially a donation of the cord blood to the bank. The bank then sells the cored blood for transplants or grand funded research. A third option for cord blood banking, new this decade, is research cord blood banking. Research cord blood banks own the cord blood that is essentially donated to them by the parents, and they sell it to grant funded or other researchers. Public and research cord blood banks charge approximately $35,000 for each collection of cord blood that they sell.