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Trends in Investment Returns

Thu, January, 2 2014

Many larger banks are urging their institutional and corporate customers to reduce deposit levels or face fee increases. Banks are citing regulations that take effect January 1 making the additional fees necessary. In an effort to prevent a banking crisis regulators are requiring banks to set aside a larger portion of high quality assets that could be converted into cash during a crisis to cover a projected flight of deposits over a 30 day period.

Banks are charging these deposit fees to large institutional and corporate customers, and not retail customers, because the larger institutional and corporate depositors will be the first to pull deposits in a crisis. If the banks are required to set aside assets against deposits this will limit their lending capacity and increase their costs. A well-defined and executed investment plan could help local governments reduce deposits, minimize fees and increase investment earnings.

Trends in Investment Returns - December 9, 2014

December 9, 2013 November 9, 2014 Today
1 Yr Certificate of Deposit 0.5000% 0.4500% 0.5000%
3 Yr Certificate of Deposit 1.0500% 1.4000% 1.5000%
5 Yr US Agency Note 1.8500% 2.0000% 2.1000%
Money Market Funds 0.01% - 0.20% 0.15% - 0.35% 0.15% - 0.35%

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Ehlers Investment Partners

  • Locations

N21W23350 Ridgeview Parkway West, Suite 100
Waukesha WI 53188-1015
Toll Free: (800) 717-9742


3060 Centre Pointe Drive
Roseville MN 55113-1122
Toll Free: (800) 717-9742

  • Registered investment adviser with the Securities and Exchange Commission (SEC)
  • Wholly-owned Subsidiary of Ehlers Companies
  • Affiliated with Ehlers & Associates and Bond Trust Services Corporation
  • Registered January 12, 2009