Cash Management

The primary function of the office is to receive, deposit and invest wisely all state funds. The cash management division daily takes in the deposits from other state agencies – an average of $112 million daily. This staff of 7 invest about $3 billion in state dollars in state banks daily, they reconcile Treasury bank accounts, and do all of the number crunching to keep the books in order

The Treasurer seeks to invest state funds in a safe manner to preserve principal and earn the highest return possible while meeting the daily cash flow needs of the State and conforming to all relevant state statutes. The Cash Management Division of the Treasurer’s Office is responsible for cash management and banking services.

Approved State Depository. Any bank or savings association that (1) conducts the business of making loans and taking deposits in the State of Alabama, and (2) is an active member of the SAFE Program may file a written application with the Treasurer to be designated as a state depositary. A bank must be designated as an approved state depository in order to hold any State of Alabama treasury monies.

To apply, the bank completes the Application for Designation of State Depository, attaches a copy of the bank’s Certificate of Qualified Public Depository to confirm membership in the SAFE Program, and mails the documents to the Treasurer. Upon filing of the application, the Treasurer shall certify the application to the Governor, and the Governor may designate the bank as a state depository. Upon designation, the Treasurer will provide a written order to the bank declaring it as a state depository until its authority is revoked.

Demand Deposit Accounts. The Treasury has limited demand deposit accounts with minimal balances. Demand deposit accounts are necessary for the payment of the warrant cash letter. Additionally, they provide depository locations across the state for various state agencies. Minimum balances are maintained in these accounts. These accounts are selected by location and cash concentration services.

Time Deposit Open Accounts (“TDOA”). Time deposit open accounts are essentially certificates of deposit. The terms and rate of TDOA are set by Code.

The maturity terms may be 91 days, six months, or one year. Any TDOA with a maturity of 91 days is subject to early withdrawal without penalty with a 7 day notice from the Treasurer. The rate of interest to be paid on TDOA corresponds to the rate borne by United States Treasury obligations of comparable maturity. With maturities of 91 days and six months, the rate shall be the average auction rate of the four most recent auctions held prior to deposit. The one year maturity TDOA rate is the weekly average one year constant maturity yield published by the Federal Reserve System for the week preceding the deposit date.  Current TDOA rates.

Interest is calculated on a 30/360 day basis and is paid monthly. The Treasury initiates receipt of interest through ACH the last business day of the month.

To request TDOA monies, the bank should complete and fax the TDOA Request Form. The Treasurer or designee will contact the bank within two working days to discuss the request.