Huntington SD Switches Investments for Interest
Low interest rates are having an impact on all investors, even big institutional ones like the Huntington School District, which recently moved its trust and agency scholarship accounts out of New York CLASS and into JP Morgan.
“For well over 15 years, the Huntington School District has been an active participant in the New York CLASS program,” said David H. Grackin, Huntington’s assistant superintendent for finance and management services. “This is a cooperative investment pool that was created in the early 1990s as an alternative to investing in certificates of deposit and money market accounts at local banks.”
Unfortunately for the district, interest rates on the monies it has invested with New York CLASS have plummeted over the past three years. “In the month of October, the district was receiving no interest on our scholarship accounts,” Mr. Grackin said. Huntington currently has $921,000 of trust and agency scholarship accounts invested.
Mr. Grackin and Jill Miranda, the district’s treasurer, have held a series of discussions about the interest rate situation and reached a decision that “effective immediately, we are going to pull the monies out of New York CLASS entirely and place them into a JP Morgan account. Currently, that account garners .10 percent interest.”
The type of financial instruments that New York CLASS can invest in “is severely limited by legislation and consequently, the school district needs to look at other alternatives,” Mr. Grackin said.