Excess Balance Account Frequently Asked Questions

Interest Earnings Calculations and Payments

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Q: How will interest earnings for the excess balance account be calculated?

A: The Federal Reserve Banks will calculate interest earnings on the aggregate balance in the excess balance account based on the average of end-of-day aggregate balances held in the account over the course of a seven-day maintenance period, beginning on a Thursday and ending on the following Wednesday. Aggregate balances in the excess balance account will earn interest at the excess balance rate set by the Board of Governors of the Federal Reserve System. For details on the formula used in the calculation, please visit www.reportingandreserves.org (Off-site Link). For current rates, please visit Interest on Required Reserve Balances and Excess Balances (Off-site Link).

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Q: Will the Federal Reserve Bank calculate the excess balance account interest payments at a participant level?

A: No. All interest will be calculated and paid to the excess balance account based upon the aggregate average balance held over the maintenance period.

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Q: Will interest earned on excess balance account balances be credited to the agent’s master account?

A: No. Interest earned on the aggregate balance in the excess balance account will be credited directly to the excess balance account.

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Q: How will interest earnings in the excess balance account be disbursed?

A: The Federal Reserve pays interest on the aggregate balance in the excess balance account. A participant in an excess balance account and the agent must agree on the method for disbursing interest attributable to the participant.

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Q: When will interest payments be credited to an excess balance account?

A: Interest will be credited to the excess balance account fifteen (15) days after the end of each seven-day reserve maintenance period in which the interest was earned.

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