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The first quarter of 1998 saw 13 of the 143 Eighth District Note Option participants earn approximately 40 percent of the total investment returns. The disproportionately high return to these relatively few institutions is attributed to their acceptance of Treasury Direct Investments.
The Direct Investment program allows institutions to receive excess Treasury funds and invest them in a variety of investment vehicles, typically Fed Funds and Commercial Paper. Eighth District Note Option participants that invested in these instruments earned a minimum additional aggregate $176,000 from Treasury funds accepted during the first three months of this year.
"Financial institutions can take full advantage of much higher returns through the Direct Investment program," said Judie Courtney, assistant vice president of Treasury Relations at the St. Louis Fed. "We strongly encourage all institutions that use the Note Option to look into this program."
Note Option participants can sign up for the Treasury Direct Investment Program by calling Scott Davis at (314) 444-8972.