Excess Balance Account Frequently Asked Questions

Procedures for Establishing Excess Balance Accounts

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Q: Whom should potential participants contact in order to participate in an excess balance account?

A: A prospective participant should contact an institution that acts or plans to act as an agent for an excess balance account. The institution contacted may, but need not, be the prospective participant’s correspondent. A prospective participant may also contact its Administrative Reserve Bank's excess balance account contact for more information about excess balance accounts.

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Q: Whom should prospective agents contact in order to serve as an excess balance account agent?

A: A prospective agent for an excess balance account should contact its Administrative Reserve Bank’s excess balance account contact. The prospective agent should be prepared to provide a list of prospective participants in the excess balance account to its Administrative Reserve Bank. The Administrative Reserve Bank will verify that the agent and each of the participants are eligible to participate in an excess balance account. Upon receiving verification from its Administrative Reserve Bank, the agent may take the necessary steps to establish the excess balance account.

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Q: After obtaining approval to serve as an agent, what additional steps must an agent and participating institutions take to establish the excess balance account?

A: After obtaining approval to serve as agent for an excess balance account, the agent must submit to its Administrative Reserve Bank an executed Excess Balance Account Agreement, including Appendix A of the Excess Balance Account Agreement, for each participant. For detailed instructions on setting up an excess balance account, please visit Excess Balance Account Setup.

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Q: Must an agent submit a Board Resolution and Official Authorization List to establish an excess balance account?

A: No. The Board Resolution and the Official Authorization List that the agent submitted for its own master account will be used for excess balance account authentication.

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Q: When can institutions open an excess balance account?

A: The agent can begin the approval and agreement process immediately; however, actual excess balance accounts will not be opened prior to July 2, 2009.

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Q: Where should participants submit completed forms?

A: Participants must send a completed Appendix A of the Excess Balance Account Agreement to the agent. The agent will then forward the documents for all participants to the Administrative Reserve Bank.

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Q: What records must the agent maintain?

A: The agent must maintain daily records that reflect: 1) All participants in the excess balance account; 2) The total dollar amount of funds in the excess balance account; and 3) The dollar amount attributable to each participant in the excess balance account. (The sum of all participant balances must equal the total dollar amount of funds in the excess balance account.) The agent is also expected to maintain records that identify the accrued interest attributable to the excess balances of each participant and the amount of interest that each participant received.

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Q: What steps must a participant take to sever its relationship with the excess balance account agent, and in what time frame will the change be executed?

A: A participant may revoke its designation of an agent by submitting an executed Appendix B of the Excess Balance Account Agreement to the agent. The revocation will not be effective until the next business day after the duly executed Appendix B is received and accepted by the Federal Reserve Bank.

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Q: Whom should agents or participants contact with additional questions?

A: A prospective agent or participant may contact its Administrative Reserve Bank’s excess balance account contact.

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