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MSBI CDs
CD Program From The Minnesota State Board Of Investment
The Minnesota State Board of Investment (MSBI) has offered a Certificate of Deposit Program to financial institutions throughout the state of Minnesota since 1980. The program is on-going, offered quarterly, with the amount of funds committed depending upon the State's cash position and the relative attractiveness of CD's to other investment alternatives. UBB Securities has been a clearinghouse bank for this program since its inception.
- Who may participate?
- What maturities are available?
- What are the subscription dates of the CD offerings?
- When will the CD's settle?
- How is the rate determined?
- How is the interest calculated?
- Is collateral necessary?
- What are the subscription minimum/maximum amounts?
- How will the funds be transferred?
- What is the necessary paperwork?
Who may
participate?
Any financial institution chartered in Minnesota and covered by
FDIC insurance is eligible. The subscribing institution must be
"well capitalized" as defined under FDIC regulation: (1) has a
Total Risk-Based Capital Ratio of at least 10%; (2) has a Tier 1
Risk-Based Capital Ratio of at least 6%; (3) has a Tier 1 Leverage
Ratio of at least 5%; and (4) is not subject to any agreement to
meet and maintain a specific capital level for any capital measure.
No FDIC waivers will be accepted.
What maturities
are available?
The MSBI will purchase CD's with three and/or six month maturities
at each quarterly offering. The maturity date may vary, but always
mid-month each January, April, July and October. In an instance of
a weekend or holiday, the date will be moved forward
appropriately.
What are the subscription
dates of the CD offerings?
Subscription dates may vary, but always at the beginning of the
months of January, April, July and October. In an instance of a
weekend or holiday, the date will be moved forward
appropriately.
When will the
CD's settle?
The settlement date is the same as the maturity of the previous
subscription. In an instance of a weekend or holiday, the date will
be moved forward appropriately.
How is
the rate determined?
The yield will be set by the MSBI using the average secondary CD
rate quoted by the New York Federal Reserve Bank on the morning of
the subscription date or otherwise determined by MSBI officials. Click here to see
historical rates.
How is the interest
calculated?
Interest is computed on a 360 day basis and is payable at
maturity.
Is collateral
necessary?
No. The FDIC has stated that it will insure up to $250,000 in each
financial institution for each participant's share of
the retirement plan under the control of the MSBI. Since
1996, UBB Securities has also been a custodial bank for the MSBI Securities Repurchase
Program.
What are
the subscription minimum/maximum amounts?
The minimum subscription amount is $100,000. The maximum amount any
financial institution may have outstanding at any given time is
$1.5 million.
How
will the funds be transferred?
As the clearinghouse, UBB Securities will deposit funds in the
financial institution's DDA account at UBB on settlement day for
purchases; UBB Securities will charge the financial institution's
DDA account at UBB on settlement day for maturities.
What is the
necessary paperwork?
UBB Securities will make the subscription order to the MSBI on
subscription day on behalf of the subscribing institution. The MSBI
will send all required paperwork to each financial institution
along with a letter of instruction. The financial institution
issuing the CD will hold the Certificate in safekeeping for the
MSBI. UBB Securities will send a confirmation of the subscription
outlining the settlement details.
Please Note: Portions of the above program description were provided by the Minnesota State Board of Investments and may change with or without notice. UBB Securities deems that all statements contained herein, while not guaranteed, are based upon information we believe to be accurate and reliable.
