Repurchase Accounts (Not FDIC Insured)
A Repurchase Account (Repo) allows business customers with excess balances to effectively earn interest on their funds while still maintaining their liquidity. Repos are transactions in which the bank agrees to transfer to the customer securities or financial instruments against the transfer of funds by the customer. Repurchase Accounts can be established with a minimum balance of $100,000.
Daily excess funds are automatically swept from the operating account to the Repo account or vice-versa. A "target" balance is set in the operating account to provide enough balance to offset the service charges. The bank automatically moves the money back and forth as needed (in $10,000 increments) to cover checks or if there is a surplus in the operating account.
Benefits:
- The transfers are made automatically
- Minimum risks and additional security. Repos are secured by U.S. Government securities
- Competitive rate
- Quick liquidity
Repurchase accounts:
- Are NOT deposits within the meaning of 12 USC § 1813(l)
- Are NOT insured by the FDIC
- Are subject to investment risk, including possible loss of principal invested