Condo Association Reserves
Hi Terry,
I’m the secretary in a small condo association (6 units). We currently have a Reserve of $32,000 sitting in a savings account (Fifth-Third) earning only .02% interest. We have an expensive roof replacement ($87,000) coming up in 2031 and we need to grow the Reserves considerably before then to avoid the necessity of securing loans.
I saw your report this morning on the current rate of I-bonds and Treasury Bonds. Is this something that condo associations can purchase? And would we do it the same way as an individual — purchase them online?
Terry Says
Yes, a condo association could definitely buy Treasury Bills. Are you organized as a non-profit or LLC? You just have to check the box that applies and use your tax ID.
Ideally you would stagger purchases — buying some 26 week bills every few weeks — and choose the auto-rollover option. As long as you don’t need the reserves in the immediate future this is a perfect and safe strategy. And if you do need money back, there will always be maturing bills. So you can cancel the rollover and the money will be deposited back into your association bank account.
