Fed Funds

CBB’s Federal Funds sales/purchase program is designed to help you meet daily liquidity needs. 

  

At CBB, we continuously monitor the Fed Funds market to ensure that our clients receive the best possible rates.  We accept your excess liquidity as an “agent” and then sell it to a number of highly rated domestic financial institutions whose credit criteria we review quarterly.  We consolidate individual banks’ funds into large blocks to attract higher rates and minimize risk.  We do not burden our clients with wire transfer fees or long-distance telephone charges.  CBB manages all allocations and accounting, and distributes your excess funds proportionately to the purchasing institutions.

 

We also purchase excess liquidity as “principal” on a limited basis and use these funds to fund our short-term investments.

 

Benefits

 

  • Competitive rates through the pooling of funds
  • No charge for daily investments or returned funds
  • Elimination of concentrated credit risk
  • No administrative functions
  • All activity easily tracked online

In addition, excess liquidity can be swept into the Federal Reserve Bank Excess Balance Account (“EBA).  An EBA is a limited-purpose account at the Federal Reserve Bank for maintaining the cash balances of institutions that are eligible to earn interest on excess liquidity.  The accounts are managed by an agent on behalf of the participants.  CBB is the only bankers’ bank with an EBA serviced by the Federal Reserve Bank of Richmond.  If you designate CBB as your agent bank, your benefits will include:

  • Higher yields on overnight Fed Funds investments
  • Improved capital ratios
  • Greater risk diversification
  • Daily interest credit
  • Identical availability to all current overnight Fed Funds investments