Reserve fund signatories?

We are a small complex with a $50k reserve fund that we recently discovered is earning 0.3% despite much higher prevailing interest rates.

The board would like to move the fund to a large investment firm that pays more than 5% in a federal money market fund.

The firm wants to know which board member(s) will be signatories on the account.

I was thinking something like two signatures required, and three board members are authorized to sign, that way if one is unavailable there’s a backup.

What do others do and what are best practices for something like this?

Disclaimer: this is information, not financial advice.

There is a difference between a money market account and a money market fund.

A money market fund can actually lose principle (known as "breaking the buck"), although it's pretty rare. Most associations try to limit their investments to things that won't lose principle: CDs, money market accounts, bonds held to maturity, etc.

You might want to check out local credit unions. They often offer more attractive CD rates than you may get at a local bank, because those attractive teaser rates the banks advertise are limited to individual customers, not businesses.

Moving money to a new bank is a pain in the keister, and keeping up with authorized signers is part of the pain. Board members typically come and go, which means yet another trip to the bank and (in my experience) at least an hour of sitting in someone's office. Everything takes at least an hour, often more. The folks in the lobby seem to speed through their business, but time slows to a crawl when you're dealing with a personal banker. It's a mystery.

Bob

With CD's now over 5% they are the safest way to go.

We have all Directors as signatories on our accounts.