Caerphilly County Borough Council has managed to save £900,000 by borrowing money from itself.
The Plaid Cymru-led local authority saved the amount in fees it would have paid if it had borrowed cash from external sources.
The money will now go towards the council’s three-year £43m capital works programme announced recently.
Councillor Colin Mann, deputy leader and cabinet member for corporate finance, said: “Like other local authorities we have previously gone out to the Public Works Loan Board or elsewhere to borrow money to fund the council’s work from time to time.
“This method can prove more costly so we decided that we should look to meet spending needs by borrowing internally. In addition, when compared to borrowing, interest rates offered through the UK Government’s debt management office, for money we deposit, are currently very low so our action is very prudent.
“The money we borrow internally is over and above the income the council receives every month through things like council tax to run the authority.”