Federal Funds
Maximize your investment
Because we base our rates on current rather than prior day performance, our interest rates are among the most competitive in the market. In addition, we offer two higher, variant agent rates which will make you the most on your fed funds investment. Banks that invest more than $5 million receive a rate 0.04% higher than our standard agent rate. Combine these rates with the fact we allow you to invest fed funds in increments of $1,000 as opposed to $10,000 or $100,000 like some of our competitors, BBOK provides you with maximum flexibility and the best returns you can get for your investment.
- Agent Federal Funds Pool
BBOK maintains a Federal Funds Pool whereby we act as your agent and place your bank’s Federal Funds upstream with approved banks. We calculate the daily interest rate for this Pool by taking the weighted average rates which we receive from upstream banks, deducting 1/8% for our service and paying the remaining rate to you. The interest is then credited to your account each day.
The list of qualified banks with which we place Federal Funds is determined quarterly. All banks on the list are one billion dollars in size or larger, and are rated A+, A, B+, or B by LACE rating service. You may view this list of upstream institutions as well as a copy of the latest BBOK Statement of Condition on this site.
Investing in a number of banks enables us to see that your investment in any one bank does not exceed your loan limit. In turn, this allows you to draw interest rates on an unsecured basis, rather than a lower rate on a secured basis. By spreading your Federal Funds among a number of banks in the Pool, you also avoid the problem of an undue concentration of Federal Funds in any one bank.
BBOK charges nothing for participation in the Federal Funds Pool. However, we do require that you maintain a minimum DDA account balance of $10,000.00 with our bank. Funds may be invested in the Pool in multiples of $1,000.00.
- Federal Fund Sales/Purchases as Principal
Bankers’ Bank of Kansas will sell funds downstream on an unsecured or secured basis to any Kansas bank which maintains a correspondent relationship with us. Unsecured downstream sales are available to those banks rated A+, A, B+, or B by LACE rating service, limited to one-third of their equity capital as of the latest call report available to us. Banks rated C+ or C are limited to one-half the amount specified above. We will also sell secured downstream Federal Funds at a lower borrowing rate to those banks pledging qualified securities.
BBOK will purchase, as principal, Federal Funds to assist the customer bank in managing its liquidity.
