Certificate of Deposit Program Structure 

 

  There is a two-step process for financial institutions to receive state funds.  The first step is to become a Qualified Public Depositor.  The application and information on how a financial institution becomes a Qualified Public Depositor (QPD) is available from the Treasury's Bureau of Collateral Management.  Please click on the menu bar for Collateral Management/Program Administration/QPD's via the Treasury web site and follow the instructions on their site.

The second step is to complete and return the following documents:

  •         Certificate of Deposit Agreement

  •         Authorization Agreement for Preauthorized Payments

  •         Wire Transfer Authorization Form

These documents are obtained by calling the Treasury at 850-413-2775 or 850-413-2794.  Treasury documents will be mailed to the official bank address listed in the Florida Financial Institutions Directory.  Completed documents should be signed and the originals mailed to:

Chief Financial Officer of Florida    
Division of Treasury/Bureau of Funds Management
Certificates of Deposit
Hermitage Centre, 4th Floor
200 E. Gaines Street
Tallahassee, FL 32399-0344

Once the documentation has been confirmed, within five business days, the participant will be set up as a new CD Participant in the CD system application.

The total amount of funds placed in any one Qualified Public Depository, shall be no more than the lesser of 10% of the financial institution’s assets or $200,000,000.00.

State funds are placed in a Qualified Public Depository for two, three and/or five year maturities.  Funds will be collected through the Automated Clearing House when certificates mature.

Two, three and/or five year fund placements will be made to Qualified Public Depositories once a month.  The total amount of funds available for each maturity, the minimum acceptable interest rates for each maturity, and the maturity dates of the certificates of deposit will be emailed to participating qualified public depositories on the 20th of every month, or if the 20th falls on a weekend or holiday, the first work day after the 20th.  This notification will be sent no later than 8:30 A.M. Eastern Time.

The Chief Financial Officer will establish the maturity dates, minimum acceptable interest rates and the total amounts to be placed.

Qualified Public Depositories will submit request(s) for funds in the prescribed format.  If a Qualified Public Depository chooses to bid on more than one maturity, a separate bid must be submitted for each maturity date.  The submission for all requests must state the interest rate bid, the amount requested and the maturity date.  The amount requested should be a multiple of $100,000.  If five-year placements are offered, five-year bids will be processed first.

Bids must be received by 10:00 A.M. Eastern Time on the day of notification.  Unless other arrangements are made, bids must be made by completing the bid request form on-line and emailing it to Treasury.  

Funds will be placed in descending order of interest rate bids until all available funds are placed or until all acceptable bids are filled.

When certificate of deposit requests exceed available funds, placements will be made on the basis of the highest interest rate bid first, then the next highest rate until all available funds are placed.  If there are identical interest rate bids and insufficient funds to fill all requests, then funds will be distributed on a pro-rata basis.  However, such pro-rata distribution will be only in multiples of $100,000.00.

Qualified Public Depositories must quote interest rates to 2 decimal points (i.e. 8.75%).

Funds will be distributed by wire transfer on the same day.

On the maturity date and on scheduled interim interest payment dates, Qualified Public Depository shall allow the “interest and principal amount” designated in the confirmation to be debited to its account, or to its correspondent financial institution’s account and credited to the demand account of the Chief Financial Officer.  Such debit and credit shall be through the Automated Clearing House operated by the Federal Reserve Bank of Atlanta in Jacksonville or Miami. Qualified Public Depository must have completed and have on file with Chief Financial Officer the Authorization Agreement for Preauthorized Payments.

The Qualified Public Depository must place the interest and principal amount due in the designated ACH account by each interest due date and principal maturity date as stated on the confirmation. 


The Chief Financial Officer will calculate interest to be paid quarterly by the following:

Quarterly Interest: 

(Amount of Principal x Interest Rate x Number of Days the Principal has been held by the Qualified Public Depository by Number of Days in the Calendar Year).
            Interest will start accruing on the date of deposit.

ADDITIONAL INTEREST:

Additional interest will be charged to Qualified Public Depository if the funds due are not in the designated account at such time the Chief Financial Officer’s demand bank sweeps the designated ACH account.  Such additional interest shall be calculated at the Fed Funds rate in existence during the time period between the funds due date and the date the funds are received by the Chief Financial Officer.  Such additional interest shall be calculated on the interest and principal amount due starting from the interest and principal due date to the day the Chief Financial Officer has been credited with the interest and principal due.  The Chief Financial Officer will notify Qualified Public Depository the additional interest amount and instructions for payment.

 EARLY WITHDRAWAL POLICY:

A financial institution requesting early withdrawal from the State of Florida Certificate of Deposit program will be penalized only in the case of a loss to the State. This is based upon comparing the Certificate of Deposit contract rate versus the rate the Treasury could earn by investing the returned funds in U.S. Treasury securities with a maturity comparable to the Certificate of Deposit maturity. If there was no loss to the Treasury, requests can be granted with no penalty. 

 If the difference between the two rates creates a loss to the Treasury, early withdrawals will be allowed with payment of a penalty. 


Penalty calculation: 

((Certificate of Deposit Contract Rate – US Treasury Rate = Rate Difference)
             (Principal Amount x Rate Difference x Number of Days Held Number of Days in the Calendar Year = Their Interest Penalty))

 If requesting more than one certificate of deposit amount to be withdrawn, a separate calculation will be made for each Certificate of Deposit.

Financial institutions accepting the terms of the early withdrawal policy will not be allowed to participate in placement of Certificate of Deposit funds until after the date of the last maturity date of the funds being withdrawn. Funds being returned to Treasury must be wired to the Chief Financial Officer’s concentration account on the agreed upon date. If the return of funds results in a penalty being due to Treasury, the Chief Financial Officer will notify Qualified Public Depository the principal, any interest due and the penalty amount due with instructions for payment.

Revised March 3, 2009   

 
   
 

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