Demand for State Treasury Deposits in Iowa Financial Institutions Brings Competitive Bidding
October 17, 2018
DES MOINES, IA - State Treasurer Michael L. Fitzgerald announced the results of the October 9 online Invest in Iowa auction; $100 million was deposited in 33 financial institutions across the state. The state will receive an average rate of return of 2.55% on these six-month certificates of deposit. “Demand for money was high as forty-seven banks competed. In the end, the average rate exceeded the established minimum by five basis points,” Fitzgerald said. “The state will receive over a million dollars in interest due to the success of this auction. In the past 15 years, Invest in Iowa auctions have earned over $36 million in interest for the state.”
Fitzgerald created the Invest in Iowa program in 1983 as a way to deposit state funds in Iowa financial institutions. The treasurer’s office uses an auction format offering state deposits to Iowa financial institutions six times a year, which allows the state to earn a competitive return on the funds while ensuring local institutions have the money they need to keep the economy moving. The financial institutions hold the funds as CDs and use the money to make loans.
“We currently have over $344 million invested in Iowa financial institutions,” Fitzgerald said. “The demand for this auction was high and will boost the state’s economy by putting money back into Iowa. Every auction stands as a testament to how well this program supports local institutions across the state.”
Invest in Iowa quarterly auctions are held on the second Tuesday of January, April, July and October. In response to growing interest in this program, two auctions offering one-year term CDs are also held throughout the year. The next auction is scheduled for January 9 at 10 a.m. and will offer six-month term CDs. Each auction has an established minimum interest rate and a minimum bid. To learn more about the Invest in Iowa program, visit IowaTreasurer.gov, select “Invest in Iowa” under the “For Businesses” tab or contact the treasurer’s office at 515-281-5368.