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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.

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