Federal Funds

Overnight Fed Funds

Bank of North Dakota ensures an active market for Federal Funds (Fed Funds) trading. The Bank provides a daily market for the purchase of funds from or the sale of funds to a financial institution. Fed Funds purchased from BND are subject to an approved credit line. This unsecured credit line can be established by online review of the financial institution’s (FI) last three years’ call reports. Borrowing Fed Funds for any 20 business day period requires the FI to be out for at least five consecutive business days. The minimum transaction for Fed Funds is $25,000 with $5,000 increments thereafter.

No Day Out

BND also offers a no day out Fed Funds program to banks that use BND as their primary safekeeping depository; the securities can be used to meet liquidity needs through the use of BND programs. When BND is the financial institution’s primary safekeeping depository, you are not required to be out of Fed Funds for the five business days. “Primary” means BND holds all securities except those held at the Federal Reserve Bank or the Federal Home Loan Bank.

Secured Fed Funds

BND will establish a Secured Fed Funds line for financial institutions interested in establishing a secured line of credit. BND will accept book entry U.S. government or federal agency securities and North Dakota municipal securities as collateral. Out-of-state municipals must be general obligations and rated “A” or better by a nationally-recognized rating service. The secured line limit is based on the market value of the securities pledged.

Term Fed Funds Sold

To accommodate seasonal borrowing needs, BND’s Fed Funds program includes Term Fed Funds Sold. The maximum borrowing (total of Term Fed Funds and Overnight Fed Funds) is the financial institution’s approved Fed Funds line. The minimum transaction is $100,000. Term borrowing is available one 90-day period per calendar year. During the 90-day period, terms of 30, 60 or the full 90 days can be selected. The rate for term borrowing is subject to market and term.

If you have questions, contact us or call (701) 328-5723.