Term Deposit Facility
The Term Deposit Facility is a program through which the Federal Reserve Banks offer interest-bearing term deposits to eligible institutions. A term deposit is a deposit with a specific maturity date. The Term Deposit Facility was established to facilitate the conduct of monetary policy by providing a tool that may be used to manage the aggregate quantity of reserve balances held by depository institutions. An increase in term deposits outstanding drains reserve balances because funds to pay for them are removed from the accounts of participating institutions for the life of the term deposit.
Operation Results
Recent operation results may be found on the Board of Governors’ website (Off-site).
An archive of previous operation results may be found on the Board of Governors’ website (Off-site).
Term Deposit Facility Operations
Term deposits may be awarded through a competitive single–price auction format with a non-competitive bidding option, a fixed-rate format at the interest rate specified in advance, or a floating–rate format. The interest rate paid on term deposits awarded through a floating–rate format will be the operation effective interest rate, which is determined by the average of the daily effective rates over the term of the instrument. The daily effective rate is the sum of the value of the reference rate for that day and the spread rate for the operation.
Please refer to the Board of Governors’ website (Off-site) for all press releases related to the Term Deposit Facility.
Please note that credentialed Term Deposit Facility participants will automatically receive all email notifications.
Term Deposit Facility Application
Term Deposit Facility Setup
Any institution eligible to receive interest on balances held at a Federal Reserve Bank can participate in the Term Deposit Facility upon the approval of its Reserve Bank. To participate, eligible institutions must complete the steps outlined on the Term Deposit Facility Setup page. The typical time from submission of the necessary forms, requests and agreements to being ready to participate is between 7 and 10 business days provided that all required materials are complete and accurate. Errors or omissions can delay the process.
Questions?
Please contact your Term Deposit Facility District Contact with questions about the Term Deposit Facility. For technical assistance with the Term Deposit Facility application, contact the Federal Reserve’ Support Center.