Overnight Investment Account/Repurchase Agreement
First State Bank Central Texas offers an excellent way to maximize the return on excess operating funds.
- Our Overnight Investment Account* allows funds in excess of an established target balance in a commercial checking account to be invested each night (recommended minimum investment is $100,000).
- Along with the Overnight Investment Account*, a Repurchase Agreement* is executed (which is the sale of marketable securities from the bank to the commercial customer wherein the bank agrees to buy back the securities the following business day at the same price plus interest).
- The interest rate paid on the investment is determined by the bank each day and based on a review of various market indices.
- The target balance in the commercial checking account is typically established to maintain collected balances to offset service costs and may be adjusted at any time as necessary.
With greater than overnight liquidity, a customer may buy a Repurchase Agreement (Repo)* for the purpose of laddering excess liquidity in varying maturities.
- The interest rate paid on the investment is determined by the bank at the time the instrument is purchased.
- Upon maturity, the interest is credited to the commercial account along with the return of the original investment amount.
- Recommended minimum investment amount is $100,000.
* Overnight Investment Accounts and Repurchase Agreements are not bank deposits. Investment is not guaranteed by First State Bank Central Texas, is not FDIC insured, and may involve risk to principal amount invested.
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