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I mean given that it's a buffer it can't exactly be held as an illiquid asset. How much interest can you realistically get on this, and is it worth the risk if
by stu2b50 6y ago
I mean given that it's a buffer it can't exactly be held as an illiquid asset. How much interest can you realistically get on this, and is it worth the risk if a bunch start going under and you need the liquidity now rather than later?
- graton 6y agoYou can put the float into a money market fund. It is liquid and can earn maybe 1% interest. Which doesn't sound like a lot, but it is free money. And if you have millions of dollar in the reserves over a course of a year it can add up. $10 million at 1% is $100,000 in interest. I imagine they would have more than $10 million in reserves.
- wolco 6y agoIt would cost more for one new employee to run it than the savings.