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The Bank of North Dakota (BND) ensures an active market for Federal Funds (Fed Funds) trading by providing a daily market for the purchase of funds from or the sale of funds to a financial institution.
Fed Funds purchased from BND are subject to an approved credit line. This unsecured credit line can be established by submitting your last three years' call reports.
Borrowing Fed Funds for any 20 business day period requires your financial institution to be out for at least five consecutive business days. The minimum transaction for Federal Funds is $25,000 with $5,000 increments thereafter.
BND also offers a no day out unsecured Fed Funds program to banks that use BND as their primary safekeeping depository. If you use BND as your primary safekeeping depository, you would not be required to be out of Fed Funds for the 5 business days. This is offered to our primary safekeeping customers because the securities could be used to meet liquidity needs, if necessary, through the use of BND programs. (Primary means all securities except those held at the Federal Reserve Bank or the Fed Home Loan Bank).
BND will establish a Secured Federal Funds line for financial institutions interested in establishing a secured line of credit. BND will accept book entry U.S. Government or federal agency securities and municipal securities as collateral. The secured line limit is based on the market value of the securities pledged.
To accommodate your seasonal borrowing needs, BND expanded its current Fed Funds program to include Term Fed Funds Sold. The maximum borrowing (total of Term Fed Funds and Overnight Fed Funds) is your financial institution's approved Fed Funds line.
The minimum transaction is $100,000. Term borrowing is available one 90 day period per calendar year. During the 90 day period, terms of 30, 60, or the full 90 days can be chosen. The rate for term borrowing is subject to market and term.
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