Take Advantage of the Treasury Investment Program

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For almost 20 years, the U.S. Treasury has offered an investment opportunity to Treasury tax and loan (TT&L) depositary institutions--financial institutions that accept and retain tax payments from companies and report the amount received to their Federal Reserve office. This opportunity is called the Treasury Tax and Loan Investment Program.

Financial institutions participating in this program, called note option depositaries, can keep the tax payments received from customers and invest it instead of immediately turning the money over to the Treasury. Financial institutions retain these funds in open-ended interest bearing notes until the Treasury withdraws, or "calls," the funds.

How can you benefit from this program? Lower interest rate. The interest rate is 25 basis points below the Federal Funds rate. You can profit by loaning the money in the Federal Funds market or using it for other more profitable investments.

You also benefit from increased liquidity. Participating institutions retain customers' tax deposits as a primary source of funds, so they have liquid investments.

A booklet describing this program in greater detail was distributed to TT&L depositaries in October. To obtain a copy or to learn more about the unique investment opportunities this program offers, contact Mary Sanders in St. Louis at (314) 444-8509.