The 11th District Cost
of Funds Index
A monthly weighted average of the interest rates paid on checking and savings
accounts offered by financial institutions operating in the states of Arizona,
California and Nevada. Published on the last day of each month, the COFI
represents the cost of funds for western American financial institutions.
The COFI is not an interest rate. It reflects the interest expenses reported for
a given month by the COFI Reporting Members, as described below. The interest
expenses are incurred from the COFI Reporting Members' various sources of funds.
Deposits -- including checking and savings accounts, certificates of deposit,
money market deposit accounts, transaction accounts, and passbook accounts
(collectively known as "Deposit Accounts") -- are the primary source of funds
for most savings institutions. Other sources of funds include loans obtained
through the credit program of the Bank (known as "advances") and from other
sources.
Notes:
The COFI is computed using several different factors, with interest paid on
savings accounts comprising the largest weighting in the average. Because of
this, the index tends to exhibit low volatility and follow market interest rate
changes somewhat slowly it is generally regarded as a two-month lagging
indicator of market interest rates.
Because it is computed using data from three western states, the COFI is
primarily used in the western U.S. while the Treasury Index is the measure of
choice in the east.
This index reported monthly. The reported
rate may lag behind two months (for instance, January's is reported in
March, February's is reported in April, etc.)
