TCU account earns extra by switching services

By renegotiating the terms of one of its bank accounts, the Tufts Community Union Treasury expects to earn an extra $7,000 to $9,000 in interest income this year.

The extra money will ultimately increase the financial health of the Treasury, which funds student organizations. It would make more funding available for student groups in future.

After researching competing interest rates on commercial and money market accounts, TCU Treasurer Josh Belkin negotiated with Citizens Bank to increase the interest rate on the Treasury's money market account by half a percent per year.

"We've been with them for a few years now, and I asked about what they could do for us," Belkin said. "The interest earned on $1 million is a lot of money."

The Treasury manages a budget funded by the undergraduate student activity fee, which increases each year and this year is $216 per student.

Treasury funds are kept in three different accounts: the money market account, an interest-bearing current account, and a university account for internal expenses.

"We are trying to be more vigilant about what we already do and the money we already have," Belkin said.

There are currently no plans to adjust this year's student activities spending to reflect the increased interest revenue. Extra revenue is currently considered "projected," and not yet factored into the budget.

"This excess is really intended for future years," Belkin explained. "However, there is plenty of money, and groups that need more money are welcome to apply."

Budget and Fiscal Coordinator of Student Activities Ray Rodriguez said that the money will "increase the level of our cushion account and it might effect slightly how much we can offer new groups."

The increased revenue will saved to accumulate a surplus, which Belkin said will "mean more money for future years and a larger principal." This will in turn generate more interest income.

"We are limited in our resources and anything we can do to manage money better helps," Belkin said. In this case, he said, "[we were] able to take better rates and do more with our money."

The Treasury's $1 million annual budget is distributed each year to 135 student organizations. The largest chunk of money, more than $150,000, goes to Concert Board, while the Leonard Carmichael Society and Hillel also receive substantial shares.

In the fall 2000 semester, the Treasury was able to increase the return on its allocated funding by switching from a checking account at Fleet Bank to a sweep account at Citizens Bank. The balance of the sweep account is available during the business day and invested into money markets overnight.

Since then, the return on student activities money has declined as interest rates have fallen. However, the Treasury has not been able to seek out more profitable investments as University regulations prohibit stocks and other risky investments.