Investment Accounts (FL)

Started by PeterB1 • 5 replies • 1241 views

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PeterB1 (Florida)
Posts: 257

Posted:

In reviewing our reserve account, (over $200k) it is all in a single account. It is also invested in a money market fund which is not FDIC insured.

That sounds like 2 strikes against us. Previous posts suggest Federal law governs HOA investment - but nothing specific was stated. Does Florida law say anything.

Does this money need to be moved into a different fund? Do we need to split the account to avoid the $100k limit of FDIC?

DonnaS (Tennessee)
Posts: 5,671

Posted:

Peter,
HOA or CONDO ASSOC?

DonnaS (Tennessee)
Posts: 5,671

Posted:

Peter,
720, HOA Statutes do not have any requirements on what type of vehicle you use for the Reserves. Common sense says that DO NOT put it where it is not FDIC insured. You cannot use the stock market or any risk factor investments. Below is 720 303 (6) Budgets and the statement on the interest earned, etc.

h) Reserve funds and any interest accruing thereon shall remain in the reserve account or accounts and shall be used only for authorized reserve expenditures unless their use for other purposes is approved in advance by a majority vote at a meeting at which a quorum is present.

RogerB (Colorado)
Posts: 5,067

Posted:

Peter, I think your Board is foolish to have all that money in one money market account. I suggest placing it in higher yield safe investments (such as CD's); laddered amounts and expiration dates; and at a minimum split accounts to provide FDIC insurance coverage.

RaymondC (Minnesota)
Posts: 64

Posted:

Good advice above. Just don't get too creative..... It IS NOT an Investment Account - that's a different mindset.

This is both readily liquid and very safe - that's a Reserve Account. Get it insured....

Good luck.

PeterB1 (Florida)
Posts: 257

Posted:

Just reviewed my $200k account with the bank. We are earning good interest. He is unaware of any FDIC requirement for HOA investments.

Can anyone cite a specific document (Federal or Florida?) that requires HOA investments to be FDIC insured?

Thanks.

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