ACCESS FEDLINE ACCESS TREASURY ABOUT US CONTACT US SERVICE STATUS

Excess Balance Account Frequently Asked Questions

Excess Balance Account Policies and Procedures

Federal Reserve Financial Services is committed to providing the answers and information you need. Answers to many of our customers most frequently asked questions can be found using the links below.

If your question is not answered by the information provided on the site, My FedDirectory^SM provides a comprehensive list of service and support contacts who can assist you.

• Can participants or agents satisfy reserve balance requirements or contractual clearing balances with balances held in an excess balance account?
• To which institution(s) is the Federal Reserve Bank liable for funds in the excess balance account?
• Can an agent for an excess balance account commingle its own funds with those of the participants in the excess balance account?
• Can a participant in an excess balance account also have its own master account at a Federal Reserve Bank?
• Who can transfer funds in and out of the excess balance account?
• What transactions settle in an excess balance account?
• Can an agent elect to have its excess balance account-related service fees settle in the excess balance account rather than in its master account?
• What steps should an agent take if it wishes to have different staff members manage the excess balance account than those who are responsible for its master account?
• If an agent uses the same staff members to manage the excess balance account as the master account and wire transfer function, does it need to make any changes to its electronic access setup?
• Can a participant in an excess balance account view activity in the excess balance account with its FedLine access?
• Will the Federal Reserve Bank send agents and participants a statement at the end of each maintenance period indicating its balances maintained in the excess balance account and the interest those balances earned?
• Are excess balances maintained in excess balance accounts reportable on the Report of Transaction Accounts, Other Deposits, and Vault Cash (FR 2900)?
• Who is responsible for tax reporting to the Internal Revenue Service?

---

Q: Can participants or agents satisfy reserve balance requirements or contractual clearing balances with balances held in an excess balance account?

A: No. Balances in an excess balance account cannot be used to satisfy a reserve balance requirement or a contractual clearing balance for either a participant or for the agent.

Top of Page

---

Q: To which institution(s) is the Federal Reserve Bank liable for funds in the excess balance account?

A: Balances in the excess balance account represent a liability of the Federal Reserve Bank solely to the participants in the excess balance account. Excess account balances do not represent a liability to the agent for the excess balance account.

Top of Page

---

Q: Can an agent for an excess balance account commingle its own funds with those of the participants in the excess balance account?

A: No. An agent for an excess balance account is not allowed to commingle any of its own funds in the excess balance account.

Top of Page

---

Q: Can a participant in an excess balance account also have its own master account at a Federal Reserve Bank?

A: Yes. A participant in an excess balance account can have its own master account at the Federal Reserve Bank in the District in which it is located.

Top of Page

---

Q: Who can transfer funds in and out of the excess balance account?

A: Only the agent can transfer funds (via Fedwire^® Funds) into and out of the excess balance account to and from the agent’s master account on behalf of the participants; however, the agent must comply with any instructions from a participant about such transfers.

Top of Page

---

Q: What transactions settle in an excess balance account?

A: The Fedwire Funds transactions between the agent’s master account and the excess balance account and interest earned on the aggregate (total) balance in the excess balance account settle in the excess balance account. Federal Reserve Financial Services charges settle in the master account of the agent for the excess balance account.

Top of Page

---

Q: Can an agent elect to have its excess balance account-related service fees settle in the excess balance account rather than in its master account?

A: No. Account-related service fees can only settle in the agent's master account as required by the Excess Balance Account Agreement.

Top of Page

---

Q: What steps should an agent take if it wishes to have different staff members manage the excess balance account than those who are responsible for its master account?

A: The excess balance account has an account number that differs from that of the agent’s own master account. The agent will need to have new FedLine^® credentials issued for those individuals managing the excess balance account. The type of credential will depend on how far this separation of duties will be implemented. If the agent only separates accounting functions, the users should be given access to Account Management Information (AMI) and Service Charge Information (SCI). If the separation includes the ability to move funds into and out of the account (wire transfers), they will need a Funds Transfer specialist(s) and at least one Funds Transfer Supervisor and, as a result, they will receive a token. To issue these credentials, the Federal Reserve Bank will need new End User Authorization Contact (EUAC) forms (at least two new EUACs will need to be setup under the excess balance account) and Subscriber request forms for each person requiring access.

Top of Page

---

Q: If an agent uses the same staff members to manage the excess balance account as the master account and wire transfer function, does it need to make any changes to its electronic access setup?

A: No. Staff will have the same electronic access capabilities with the excess balance account as they do with the existing master account, including wire transfers.

Top of Page

---

Q: Can a participant in an excess balance account view activity in the excess balance account with its FedLine access?

A: No. Only the agent for the excess balance account can view activity in the excess balance account.

Top of Page

---

Q: Will the Federal Reserve Bank send agents and participants a statement at the end of each maintenance period indicating its balances maintained in the excess balance account and the interest those balances earned?

A: The Federal Reserve Banks will provide this information to the agent for the excess balance account in the same manner as the agent currently receives information related to its master account. The Federal Reserve Banks will not provide this information directly to participants.

Top of Page

---

Q: Are excess balances maintained in excess balance accounts reportable on the Report of Transaction Accounts, Other Deposits, and Vault Cash (FR 2900)?

A: Participants should not report balances maintained in an excess balance account on the participant’s Report of Transaction Accounts, Other Deposits, and Vault Cash (FR 2900). Excess balances maintained in an excess balance account represent a liability of a Federal Reserve Bank directly to the participant(s) in the excess balance account, and therefore are considered to be balances due from a Federal Reserve Bank. Balances due from a Federal Reserve Bank are excluded from the FR 2900 report. The agent for the excess balance account also does not include the balance in the excess balance account on its FR 2900 report.

Top of Page

---

Q: Who is responsible for tax reporting to the Internal Revenue Service?

A: The agent of the excess balance account must submit any required tax reporting of the interest payments paid to the participants in the excess balance account.

Top of Page