4.8.4.3 Reserve Funds
A DSRF is eligible to be invested at an unrestricted yield (i.e., invested without regard to yield) if the funds are considered “reasonably required.” The amount of a reasonably required reserve fund is limited to the least of (1) maximum annual debt service on the bonds, (2) 10% of the proceeds of the bonds, or (3) 125% of average annual debt service on the bonds. In general, a reserve fund for general obligation bonds may not be able to qualify as a reasonably required DSRF.