The Best Way to Use CDs to Protect Your Parish’s Assets

For many parishes, the question of where to hold savings comes up often—especially in seasons when interest rates shift or when a parish is preparing for a project and wants to protect funds for a short period of time. That question has become even more relevant in light of the BLS latest inflation report: annual inflation climbed to 3.8% in April, up from 3.3% the month prior—the fastest year‑over‑year pace since late 2024. In an environment where rising prices can quickly erode purchasing power, parish leaders are right to ask how best to safeguard short‑term funds.

One tool that frequently enters the conversation is the certificate of deposit, commonly known as a CD. CDs can absolutely play a role in a parish’s financial strategy. When used wisely, they can do two important things at once: 

• Protect parish funds from short-term inflation, especially over a three-to-six-month period 

• Support local small-town banks, which strengthens the communities our parishes serve 

However, CDs are only one tool. They are not the right tool for every dollar your parish holds. The key is understanding which funds belong in CDs and which do not. To make that decision, it helps to think in terms of the four typical parish time horizons. 

Key Takeaways from this Article

In a nutshell:	CDs are useful for short-term protection of parish funds (3–6 months) and can also support local small‑town banks, but they are only appropriate for certain time horizons.
The right use of CDs	Depends on the parish’s four financial time horizons: operating funds (no CDs), operating reserves (possible short CDs), intermediate‑term investments (maybe, blended), and long‑term investments (not appropriate). The biggest, most common mistake parishes make is underinvesting intermediate funds into CDs.
Intermediate & Long‑term parish funds	Can be invested through the Catholic Foundation of Southern Minnesota, which provides Catholic‑aligned expertise and grants over $1 million annually to more than 60 organizations in the diocese.
Get started documenting your time horizons	Parishes should create a written Investment Policy Statement (IPS) to guide consistent, mission‑aligned decisions about liquidity, risk, and time horizons. A ready-to-use template is available here.

1. General Operating Funds (0 to 3 months) 

These are the dollars needed for payroll, utilities, sacramental supplies, insurance, and day-to-day ministry. They must remain liquid. 

Best practice:  Keep operating funds in a local bank’s checking or savings account. CDs are too restrictive for this category. 

2. Operating Reserves (3 to 6 months) 

These are what you’ll need to spend on operations 3 to 6 months down the road. Yes, your monthly giving made increase this fund in the future, but carefully managing this pool, you can manage unexpected expenses or revenue dips. 

Best practice: A very short-term CD, usually three to six months, can be appropriate here if you are certain you will not need the funds before maturity. This is where CDs can be most helpful. They offer a predictable return and protect purchasing power during short periods. If you choose a CD be certain you know all of the rules and restrictions your bank has for adding and removing funds so that you don’t get surprised by fees. 

Another option for this category is the Catholic Foundation's new Fixed Income fund. Expected to be available in July 2026, we've created a 100% fixed income pool to directly fulfill this need. The investment philosophy is to protect against inflation while removing the hassle of laddering CDs, making your funds essentially liquid while also inflation-protected.

3. Capital Reserves (1 to 3 years) 

These are funds set aside for near-term projects such as a roof repair next summer, a technology upgrade, or a small capital improvement. 

Best practice: CDs may be used for a small portion of these funds, but locking up all intermediate-term dollars can create cash-flow challenges, add hassle of managing CD laddering and simply leave money on the table. Underinvesting this category of funds is the most common mistake parishes make. Take the time to map out your time horizon so you know where these funds need to stay. A blended approach often works best. 

4. Long-Term Investments and Endowments (3 years or more) 

These are the dollars meant to strengthen your parish for the future. They include endowments, long-term savings, and any other funds intended to grow over time. 

Best practice: CDs are not the right tool here. They cannot keep pace with long-term inflation and they limit growth potential. This gap becomes especially clear when inflation accelerates. With the most recent report (5/12/26 US BLS) showing 3.8% annual inflation, long‑term dollars need investment strategies capable of outpacing rising costs over time.

This is where the Catholic Foundation of Southern Minnesota is uniquely positioned to help. 

Why the Foundation Is the Best Long-Term Partner 

When you invest through the Catholic Foundation of Southern Minnesota, you are doing more than protecting your parish’s assets. You are investing your local Catholic community of Southern Minnesota. We charge reasonable, competitive fees and use those to pay our small team of staff that helps our Catholic community everday: 

• We grant back more than one million dollars annually to over sixty Catholic organizations across the Diocese of Winona-Rochester. 

• We provide trusted, local, Catholic-aligned investment expertise at no cost. 

• We help parishes build endowments, reserves, and long-term stability. 

• We provide low-cost, local services across stewardship, philanthropy, and fundraising

• We steward funds according to USCCB investment guidelines and with the professionalism your parish deserves. 

A thoughtful CD strategy can protect your funds for a brief season. The Foundation helps protect your mission for generations. 

How Much Should Your Parish Hold in CDs? 

There is no easy way to say a percentage of your funds. Instead focus on your time horizons and follow this simple rule of thumb: 

• Operating funds: No 

• Operating reserves: Possibly, especially three-to-six-month CDs 

• Intermediate investments: Maybe, as part of a blended strategy with other investment tools like the Foundation’s low risk pool. 

• Long-term investments: No, invest through the Foundation instead 

If you are unsure how to categorize your parish’s funds, or if you would like help building a simple time-horizon plan, we’ve partnered with the Catholic Community Foundation from the Twin Cities to share a Parish Investment Policy Template. 

Final Thoughts and Next Steps 

CDs can be a helpful tool when used for the right purpose and the right time frame. They protect purchasing power for short periods and support local banks, which strengthens the communities our parishes serve. But CDs are only one part of a healthy financial strategy. The real strength comes from knowing which dollars belong where and making decisions that support both your immediate needs and your long-term mission. 

The best way to make those decisions consistently is to create a clear, written Investment Policy Statement (IPS). An IPS gives your finance council, pastor, and bookkeeper a shared roadmap. It outlines your time horizons, risk tolerance, liquidity needs, and long-term goals so that day-to-day decisions become simple and steady. 

You do not need to start from scratch. Here you can find a parish-friendly IPS template to help you build a long-term strategy that protects your assets, supports your ministries, and strengthens your parish community. 

Download the Investment Policy Statement Template here. 

If you would like help reviewing your parish’s accounts or tailoring the IPS to your needs, I am always glad to assist at ewilliams@catholicfsmn.org.