Re: Treasurer's Report as of 2011-08-31

From: Jimmy Kaplowitz <jimmy(at)spi-inc(dot)org>
To: "Barak A(dot) Pearlmutter" <barak(at)cs(dot)nuim(dot)ie>
Cc: Michael Schultheiss <schultmc(at)spi-inc(dot)org>, spi-general(at)lists(dot)spi-inc(dot)org
Subject: Re: Treasurer's Report as of 2011-08-31
Date: 2011-09-16 23:44:19
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(Not speaking for Michael, our current Treasurer, but having preceded him in
that role, here are some thoughts.)

Hi Barak,

On Fri, Sep 16, 2011 at 12:21:40PM +0100, Barak A. Pearlmutter wrote:
> which is an annual interest rate of roughly
> 100 * 12 * 13.45 / 243911.50
> =>
> 0.066 %
> Rounding up, zero point zero seven percent.
> That is, a little bit more than one twentieth of one percent.

Given how low interest rates are in the US currently, lots of accounts do have
such bad rates. It's surprisingly typical, and these things are hard to compare
quickly across countries (your country of Ireland has a very different
situation right now on this point).

You're right that for our amount of money, some better rates are likely
available, but within the FDIC-insured world in the current US interest rate
climate, we won't get dramatically more. This is especially true if we continue
our current practice of splitting the money between more than one bank, both
for significant convenience reasons and to stay below government insurance
limits. In other words, $250k is not the relevant tier from any single bank's

There are other investments that aren't government insured which can be
prudently considered, but before taking any such risk we should have more
man-hours available for such things than (primarily) a single busy spare-time
volunteer Treasurer.

If you want to identify specific banks and account products we should consider
for better interest rates, do let us know. Some relatively obvious preferences
are that it should be a US bank (including US subsidiaries of foreign banks) or
credit union offering a US-located deposit account (with or without
checkwriting privileges) denominated in US dollars, insured by the FDIC in the
case of a bank or the NCUA in the case of a credit union; and that we want room
to grow in all of our accounts before we reach $250k held with any one
institution, which is the current government insurance limit. The account of
course needs to be available to nonprofits, not solely individuals.

Finally, be cautious about suggesting online-only accounts; those often are
only accessible via several-day delayed transfer to a linked account of the
same owner, and are very lacking in customer support, which is how they can
offer such good rates. Similarly, even standard savings accounts have other
transaction frequency restrictions. All of these may (or may not) affect their
suitability for us.

Probably the best place to direct specific thoughts is treasurer(at)spi-inc(dot)org
since this is primarily his responsibility, but it's reasonable to CC whichever
of the board, spi-private, or spi-general you think is the most appropriate.
I'm definitely not trying to create more work for one very overworked Mr.
Schultheiss. :-)

- Jimmy Kaplowitz

P.S. - Thank you for crunching the numbers. It's been a while since anyone had,
though I remember doing it at some point in the past and having a similar
reaction to yours.

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