Alabama State Treasury

Our primary function in Cash Management is to receive deposits and invest state funds. We receive an average of $50 million in daily deposits from various state agencies and our staff invests about $2.6 billion in state dollars each day.

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

To apply, a 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. After the bank files the application, the Treasurer certifies it to the Governor and the Governor may designate the bank as a state depository. Once designated, the Treasurer will provide a written order to the bank declaring it 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. They also 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 seven-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.

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 business days to discuss the request.

Linked Deposit Program* The Linked Deposit Program is a partnership between the Treasury and Alabama banks for the benefit of agricultural and small business operations, and to provide disaster relief funds when needed. The program allows the Treasurer to invest State monies in participating banks in a below-market deposit wherein the bank links the deposit to a reduced-rate loan to an eligible borrower.

Citizens interested in receiving a linked deposit loan must follow normal banking procedures to apply for a loan. The bank will apply all usual lending standards to determine the credit worthiness of the eligible borrower. If satisfactory, the bank will forward a linked deposit request to the Treasurer.