For decades, many treasuries' top priority was to sweep every available dollar out of a no-interest bank account into an interest-bearing investment or apply it to a line-of-credit balance. Now some of the most alert treasuries are reversing that pattern and taking pride in the money they leave in bank accounts. It's a dramatic change of direction, but recent dramatic events could make so-called "idle balances" actually the most rewarding use of cash.

First, in response to the financial crisis, Congress last October extended FDIC insurance temporarily to cover 100% of the money held in no-interest accounts like corporate demand deposit accounts (DDAs). "Temporary" means until the end of 2009. That coverage significantly reduces the risk of leaving large amounts of cash on deposit.

Second, banks have largely removed the 10% haircut they gave to funds left on deposit, technically to compensate for their reserve requirement, now that the federal government is paying interest on their reserves, notes Dan Gill, director of customer support training at Weiland Financial Group Inc., Chicago, a provider of bank account analysis and administration software. Now all funds left on deposit typically count toward the earnings credit rate (ECR), not just 90%, and that upgrade has changed the value calculation in favor of the
earnings credit.