Low-risk investment will generate interest earnings for Louisiana

BATON ROUGE, La. – Louisiana banks bid online this week to pay the state of Louisiana interest on $63 million that will be placed in certificates of deposit (CDs), according to State Treasurer John Kennedy.

“These web-based auctions are a low-risk investment with a good return,” said Treasurer Kennedy. “We provide Louisiana banks with financial liquidity, and we earn interest doing it.”

Using a competitive Internet auction website called www.BidLouisiana.com, the Louisiana Department of the Treasury accepted interest rate bids from banks across the state during a 30-minute auction. A bid consists of the amount of money the bank wants and the interest rate it is willing to pay. The higher the interest rate, the more the state makes on the investment. The interest rate on the bids ranged from 0.150% to 0.140% with 17 banks participating.

“We limit banks to $5 million each,” said Treasurer Kennedy. “We were able to deposit money in CDs at every bank that bid. By using the Internet, we make CDs more available for banks.”

In 14 years, the state has accepted $3 billion in bids using BidLouisiana, resulting in $25.9 million in total earnings for the state. The Treasury is allowed by law to competitively bid up to 50 percent of state funds available for investment in CDs. For more information, visit the BidLouisiana website at www.BidLouisiana.com.

Contact:
Michelle Millhollon
(225) 342-0012
mmillhollon@treasury.state.la.us