Have a spare $100,000 looking for a rewarding place to park? Corporate One says it may have the solution in new off-balance sheet mutual fund products–provided by Federated Investor Funds–that are fully compliant with NCUA Rules and Regulation Part 703, said Robert Post, chief investment officer for the Columbus, Ohio-based corporate credit union.
“This is designed to get a credit union a much better yield than leaving the money in cash,” added Post.
Corporate One offers two funds: the Federated Adjustable Rate Securities Fund (FEUGX) and the Federated Government Ultrashort Duration Fund (FGUSX).
Both funds offer investing credit unions liquidity, said Post, who elaborated that an investment could be made one day and withdrawn the next. Ordinarily, that would not be prudent–Post advised that the funds work best with monies that won’t need to be called upon for perhaps 6 to 18 months–but if the need arose, the right to withdraw is there.
Minimum investments, said Post, will be “very small.” He added that Corporate One is targeting credit unions with $100,000 and higher to invest but official minimums are much lower.
“These funds will provide investing credit unions with a good way to diversify their holdings,” said Post. He added that the funds let a credit union invest in a portfolio of government bonds without having to purchase individual bonds.
Membership in Corporate One is not a requirement for investing in the funds, which are available to all credit unions in the United States.