But when rates are falling, the fixed rate investment could be quite attractive after that time period has been reached and the prevailing rates are substantially lower than they were at the time of the initial investment. Those who elected to keep all of their funds in an investment pool or stay short with fixed rate maturities were stuck with low rates of return for some time. The length of investment of funds depends upon the amount of excess funds a school district has historically had access to. By laddering out the investments, funds would be coming in during regular intervals as well as providing a good interest income for the district. The amount to be invested would depend upon the amount of excess funds available.
Conservatism is of utmost importance when investing a school district's funds.