Invest in South Dakota's Future

A joint effort between the South Dakota Treasurer's Office and The South Dakota Investment Council, the CD Program was designed to benefit economic development in South Dakota by making funds available to local financial institutions for loans. The intent is to provide the South Dakota Cash Flow Fund (State's checking account) with a market rate of return for the CD's. The CD Program for banks has been in existence since 1974. Savings associations were added in 1980, followed by credit unions in 2001. This program is governed by SDCL 4-5-26 (6) and administrative rules 6:01:02:01 and 6:01:02:02.

Bank Notice

2023-2024 CD Interest Rate: 5.64%

How it Works

Assessing Intentions

The Investment Council corresponds with financial institutions in mid-August to request updated financial and contact information for banks, savings associations and credit unions. Financial institutions that would like to receive CD offers respond with updated information.

CD Offers Calculated & Sent

Offers are based on the size of each institution's loans and municipal bonds outstanding relative to the total loans and municipal bonds outstanding for all such institutions in the state. Currently the offering amount is $35 million of one-year CD's issued on September 30 for a one-year term. The rate is based on the one-year Treasury bill rate adjusted for liquidity and collateral risk. Offering letters are sent to banks and savings associations approximately three weeks prior to the issue date.

Bank & Saving Association Acceptance

Two days before issuance, the rate is set at 11:00 AM CST. Banks and savings associations must contact the Treasurer's Office between 11:00 AM and 3:00 PM CST on the date the rate is set to indicate their decision to accept the total or part of the offer or decline the offer.

Credit Union Offers & Acceptance

After 3:00 PM CST, if there are funds remaining, credit unions that indicated interest are contacted and offered a CD using the same method for determining the offer size as for the banks and savings associations. The credit unions' decisions are communicated to the Treasurer's Office.

Paperwork Processed

Upon acceptance, the Treasurer's Office awaits the delivery of the original CD in the mail. Once the original CD is received, the document is reviewed for correct issue date, maturity date, interest rate and allocation amount. The original CD is then held at the Treasurer's Office until maturity at which time it is returned to the bank for redemption. Legislative Audit also conducts a review of the CDs prior to the maturity date.