PC #1 - That's why I recommended Money Market over CD in today's environment. All indications are that interest rates will be going up in December and 2-3 more times in 2019. If you invest in a 12 month CD, it won't benefit from any of these rate hikes. MMs, on the other hand, are more liquid, and banks will increase interest rates to stay competitive during the 12 month cycle.

Of course, how important all this is depends on how much is being put into the MM or CD. If the principle is in the $25k to $75k range, an increase of 50 basis points (0.50%) to 75 basis points (0.75%) over 12 months won't make much difference. But if the MM/CD is maxed to the FDIC limit ($250k) or more, even small interest rate increments have a noticeable effect.

Does Ally offer business accounts? When investing co-op funds, they really can't go into a personal retail account. Chances are no one will find out, but at the very least the individual who owns the account will be taxed on the interest income, and they will be legally liable for any unauthorized withdrawals or other questionable activity. Board members are fiduciaries, and it's not a good idea for fiduciaries to have personal ownership of corporation funds.

> Join the conversation Comments (2)

Yes to your question Ally offers business accounts, also you can spread your money around to money market companies. Like Charles S. if you have more then $250,000. Steven board members don't have access to these accounts only the board treasure /managing agent who approves bills/pays them. Board of directors safe guard these accounts with 2 signatures if needed. These monies will be safe after the board Treasure shows the monthly expedisures at monthly board meeting and explains/shows what was spent or earned that month. Have a great Thanksgiving

> Join the conversation

Thanks PC#1. The very same to you, and to the rest of the participants in these forums.

I agree with severely limiting signatory privileges on all reserve accounts. In our board only the president and treasurer can sign for withdrawals or transfers. We don't give withdrawal privileges to anyone who is not a board officer, including the MA. The number of withdrawals from a reserve fund should be minimal, in most cases one or less per month.

IMHO, the reserve accounts should only be used to increase the balance of the operating account if a large expense is anticipated or due. There shouldn't be any direct disbursements to any vendors or suppliers or taxing authority, etc. If direct payments are made from the reserve accounts, bookkeeping and auditing become much more complex. It also becomes more difficult to trace fraud or embezzlement. At least, that's the process we use with our reserve fund.

> Join the conversation