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County raises insured CD threshold to $1 million before requiring collateral in investment guide
Summary
The Finance Committee updated the county investment guidance to reflect a state guarantee fund increase to $1 million and voted to accept up to $1 million in CDs before requiring collateral.
Walworth County's Finance Committee approved an update to its investment guidance to reflect a recent state change that raised the state guarantee fund coverage and to allow the county to accept up to $1,000,000 in certificates of deposit without requiring bank collateral.
Staff explained that federal deposit insurance (FDIC or NCUA) covers $250,000 per depositor and the state guarantee fund historically covered up to $400,000 for certain institutions; the state fund has recently been increased to $1,000,000. Based on that change, staff recommended allowing up to $1,000,000 in a CD before requiring the bank to post collateral. The rationale is that requiring collateral drives higher rates for institutions; increasing the uninsured threshold may yield better rates for the county while maintaining effective deposit protections.
A motion to amend the investment guide to reflect the $1,000,000 threshold was moved and seconded and carried. Staff said they will implement the change in the county's CD bidding procedures going forward.
