Citing ‘inverted rates,’ Treasurer Young seeks new investments, profit for Phillips County

With the recent collapse of Silicon Valley Bank and Signature Bank, events The Associated Press called “the second- and third-biggest bank failures in U.S. history,” those willing to invest in such institutions may stand to make a profit. Thus, Phillips County Treasurer Steve Young told the Board of Commissioners in a meeting on Monday, he plans to invest using high-security government bonds and certificate deposits during a time of “inverted rates.”
Bonds, as explained by the U.S. Securities and Exchange Commission, are “similar to an IOU.” Banks looking to gain money will issue bonds and an investor – in Young’s case, Phillips County – will lend them those funds for a set period in exchange for interest. Certificate deposits, also called CDs, are meanwhile set up by investors at a bank for a set amount of time, guaranteed, in exchange for interest to the investor. They are insured up to $250,000.
In short, bonds are a loan and CDs a deposit account.
“Typically... in more normal times, if you put [an investment] in for six months, it’s going to be one rate and if you put in for a year, it will be a little higher,” Young said, “because the banks are then guaranteed they will have that money available, so they can make loans or do [other things].”
But uncertainty in present day regarding the federal government’s future actions, rising inflation and more has caused banks to prioritize short-term investing.

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