Investment Management

Local Government Investment Pool

The Local Government Investment Pool (LGIP) presents a sound investment option for local government officials.

government building Nashville Tennessee

Safety. Liquidity. A competitive return on investments.

The objectives of the fund are safety, liquidity, and a competitive return on investments. The LGIP is commingled with the State Pooled Investment Fund (SPIF). By commingling all of the dollars into a single investment pool, the economies of scale are formed creating a fund that is cost-effective and provides ample liquidity for all participants.

An opportunity for local governments to reduce the need for additional tax revenue

By creating a safe, liquid, and efficient opportunity available to all local government officials within the State of Tennessee, public-finance officials are given an option to invest taxpayer funds until they are needed, while earning the same return on investments as the State Treasurer. The LGIP provides a tool to reduce the need to create additional tax revenue.

Treasury earned more than $16 million last year for the state and local governments that participate in the SPIF.

Local Government Option for American Rescue Plan Funds

As local government entities begin to receive federal dollars from the American Rescue Plan, they may want to consider depositing the funds into the Local Government Investment Pool.

Learn More

How it works

The State Treasurer operates the State Pooled Investment Fund which includes the Local Government Investment Pool (LGIP). The legislation providing for the establishment of the LGIP (Tennessee Code Annotated, Title 9, Chapter 4, Part 7) authorizes investment in the LGIP for local governments and other political subdivisions.

Past rates (annualized rates by month)

Month	2024	2023	2022	2021*	2020*	2019
January	5.35%	4.25%	.04%	.07%	1.69%	2.36%
February	5.32%	4.51%	.08%	.05%	1.67%	2.38%
March	5.32%	4.64%	.19%	.04%	1.37%	2.40%
April		4.71%	.37%	.02%	.85%	2.41%
May		4.91%	.68%	.01%	.51%	2.40%
June		5.06%	.97%	.01%	.38%	2.38%
July		5.16%	1.38%	.02%	.17%	2.33%
August		5.25%	1.94%	.02%	.14%	2.23%
September		5.33%	2.45%	.02%	.12%	2.14%
October		5.39%	2.95%	.03%	.11%	2.02%
November		5.40%	3.45%	.03%	.10%	1.84%
December		5.38%	3.89%	.04%	.09%	1.74%

* Posted rates for July 2020 through February 2021 were updated April 13, 2021. For information regarding the adjustment, view Correction of Annualized Rates by month for the SPIF/LGIP

Apply or Manage Your Account

Download an Application

Download a Transaction Request

Information Change Request

Portfolio

Treasury publishes a monthly holdings report for the State Pooled Investment Fund and Local Government Investment Pool.

SPIF Policy

The Local Government Investment Pool (LGIP) has been commingled with funds held in the State Pooled Investment Fund (SPIF). The Investment Policy of the SPIF establishes the criteria the Board determines prudent in consideration of the purposes, terms, distribution requirements and other circumstances of the SPIF and in the best interest of the participants.

Read the Investment Policy Download the Annual Report

Tennessee State Capitol Interior

Interagency Cash Flow Projection

Tennessee Interagency Cash Flow Committee was created by TCA 9-4-610 to establish, compile, and maintain an 18-month rolling cash flow projection that projects all material sources and uses of pooled investment fund cash projected to be received and expended by the state on a monthly basis.

The assumptions utilized to generate the cash flow projection follow the presentation of cash flows.

NOTE - all numbers are unaudited.

Cash Flow Estimates Assumptions for Cash Flow Estimates

Tennessee government building with clock

Intermediate Term Investment Fund

A longer-term investment option for participants of the LGIP is the Intermediate Term Investment Fund (ITIF).

Learn about the Intermediate Term Investment Fund

Frequently Asked Questions

Click any of the following questions to view the answer.

What is the LGIP?

Tennessee Code Annotated Title 9, Chapter 4, Part 7, establishes an investment pool for the idle funds of local governments to earn income in order to reduce the need for taxes. These funds are placed by the entities into accounts that are held and invested by the State Treasurer. By combining the funds of the state's local government entities the buying power of the pool allows the LGIP to get competitive investments and usually offers better rates of return than the entities can obtain by themselves.

How do I become a participant?

Submit the Application and Agreement to Participate to The Local Government Investment Pool, P. O. Box 198785, Nashville, TN, 37219-8785. The application will be reviewed for eligibility and completeness, and you will be contacted by a member of the LGIP team.

What is the account structure?

LGIP participants are issued a six digit participant number that identifies the entity. Each participant can have up to 99 sub accounts for use in separating funds.

How are the funds invested?

The LGIP invests in time deposits, commercial paper, U.S. agency securities, repurchase agreements, and U.S. Treasuries. Please view the Investment Policy to examine the directives that govern the investing of these funds. A copy of the portfolio for the most recent month and historical periods is available on this website in order to see the specific investments held. The longest maturity allowed is 397 days. The fund must also maintain a weighted average maturity (WAM) of 60 days or less, a weighted average life (WAL) of 120 days or less, and must maintain at least 10% in daily liquid assets and 30% in weekly liquid assets. All of these requirements, and more, are the requirements of a fund that maintains compliance with GASB 79. Full compliance with GASB 79 is required in order for the fund to operate and report at amortized cost.

Is the LGIP a secure investment option?

No investment is completely risk-free, and the LGIP is no exception. However, in order to maintain a stable dollar value, a fund must have the following objectives, in this order: safety, liquidity, and a competitive return. The SPIF invests only in securities that offer the least amount of risk in order to maintain a safe and liquid environment for investing taxpayer dollars.

How are earnings calculated?

Earnings for LGIP participants are calculated and accrued monthly. Earnings are distributed by multiplying the daily balance of each LGIP account by the total portfolio yield of the State Pooled Investment Fund for the month being calculated, less an administrative charge (currently reduced to 3 basis points or .03%), and dividing the result by 365. Each day's earnings are summed to determine the monthly income to be posted to the LGIP account.

The administrative fees are reviewed periodically to ascertain that the fees are commensurate with the costs associated with managing the fund. Fees are set at a rate which will recover costs only and are not designed as a profit center for the fund managers or the State.

What is the administrative fee?

The Treasury Department assesses a fee to cover the administrative costs of operating the State Pooled Investment Fund (SPIF) and the Local Government Investment Pool (LGIP). The fees are netted against earnings. Periodically, the Department reviews these fees to determine that they are sufficient to cover the administrative costs of operating the fund. Beginning in June 2021, Treasury will temporarily reduce the administrative fee to three basis points, or 0.03%.