Withdrawal Options

Treasury

Funds are withdrawn from a financial institution's Treasury Investment Program (TIP) Main Account or Special Direct investment (SDI) Account as a result of Treasury's instructions. Financial institutions are notified of these withdrawals ("calls") several days in advance or on a one-day or same-day basis based on their Treasury Tax & Loan (TT&L) Classification {"A", "B", or "C" (please see page 3 of the Treasury Investment Program – Becoming a Note Option Depositary (PDF) for further information on these classifications)}.

Generally, the Treasury gives Class A financial institutions five business days notice before a withdrawal; Class B financial institutions three business days notice; and Class C financial institutions either one business day notice or same business day notice.

The funds are withdrawn by requesting a percentage of your Main Account balance or by requesting a specific dollar amount from your Main Account based upon your financial institution's classification. The Federal Reserve reduces your Main Account balance, debits your or your correspondent's Reserve account and credits the Treasury's account on the date specified in the notice ("call action"). TIP posts a generated withdrawal to your account either upon generation, at the beginning of the day, or at the end of the day.

Administrative

A Financial Institution can initiate a funds withdrawal from its Main Account via TT&L Plus. This function reduces your Main Account balance by a specific dollar amount, debits your or your correspondent's Reserve account and credits the Treasury's account. While the ability to perform this function online allows you more control in maintaining your balances, the Treasury does not expect frequent fluctuations in your capacity level. Frequent changes may result in a reduction of your participation on a regular basis.

Collateral Deficiency

Funds are withdrawn from a financial institution's TIP account due to insufficient collateral. Throughout the day TIP receives collateral values from the National Book-Entry Systems (NBES) and Collateral Monitoring System (CMS). These files contain aggregate collateral values for your financial institutions that TIP measures against your Main and SDI Account balance.

If your Main Account balance is greater than your aggregate collateral value, TIP withdraws the difference by reducing your Main Account balance and debiting your or your correspondent’s Reserve account.  If your SDI Account balance is greater than your aggregate collateral value, you are contacted by the TT&L Treasury Support Center and asked to pledge additional collateral.

Balance Limit

A balance limit is the maximum amount of money you want in your Main Account at any given time. A financial institution may reduce the level of funds in its Main Account by lowering its Balance Limit. If your institution reduces the Balance Limit below its current account balance, TIP immediately generates a balance limit withdrawal to reduce your Main Account balance equal to your new balance limit. Your Reserve account or your correspondent's Reserve account is then debited for any dollar amount over the new balance limit.

TIP places funds into your Main Account up to, but not over, your balance limit or your collateral value, whichever is lower. Consequently, if you reach capacity as transactions are processed during the day, any additional transactions are not posted to your Main Account but are immediately debited from your or your correspondent's Reserve account.

Similar to the administrative withdrawal feature, the ability to perform this function online allows you more control in maintaining your balances. However, The Treasury does not expect frequent fluctuations in your capacity level. Frequent changes may result in a reduction of your participation on a regular basis.

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