HOA Money Market/Reserve Interest Rate

Hi Everyone,

I just joined the forum and I have few questions but I will make different post in order to keeps topics aligned correctly.

I am part of our board for our small community of 30 townhomes (HOA) In Miami,

Currently our bank is charging us a $12 monthly fee and we are looking to transfer to another bank ( We manage the bank not the Management Company)

I am curious if anyone has any recommendations? We have an active reserve unfortunately most major banks dont offer a great % on interest rates.

What recommendations do you have for a good money market reserve for an HOA? and how safe is it?

Personally I have one with CIT Bank at 5.05% but I am not familiar with what works with HOA'S

We are currently in the market of switching both our Checking's and Savings account.

Thank you in advance

Reserves kept in money market account are typical.

Shop banks for business accounts. Likely factors (in typical order of importance):

1) how far away is a branch to make deposits
2) Fees
3) Interest earning rate

Thank you everyone for your replies!

I guess my main question is do you have any recommendations based on past experiences.

It can be both either online banking or in person, I personally use an online bank for personal account.

So no issues there as everything can be done online now.

Recommendations for both Checking's and Savings, it does not need to be the same bank for both.

With interest rates what they are right now, I would get one or two CDs in addition to
the money market account for reserves.

Guidelines for reserve funds:

* Look for institutions that offer FDIC insurance (banks) or NCUA insurance (credit unions).

* Be prepared to shop around. Many banks don't offer business accounts the same attractive high rates that individual customers can get. Credit unions can be more flexible in this respect.

* There is some sense in dealing with institutions that have a physical presence locally. You often have to change the persons who have signing authority on the accounts, and it's much easier if you can just stroll down the street to take care of it.

* If your reserves exceed normal insurance limits ($250,000), you can look for institutions that offer ICS@ or CDARS accounts. These programs allow you to hold funds at multiple institutions while dealing with only one.

* I second the recommendation on CDs. You can maximize income by laddering the CDs. To help determine how long to tie up money in a CD, ask the company that does your reserve study to provide the results in a spreadsheet so that you can see at a glance when you need to have money available and how much.