An excess balance account is an account at a Federal Reserve Bank established for one or more institutions (participants) that are eligible to earn interest on balances held at the Federal Reserve Banks. Each participant must authorize another institution (an agent) to manage the excess balance account on its behalf pursuant to an Excess Balance Account Agreement. The Federal Reserve Banks pay interest on the balance in the excess balance account over the reserve maintenance period and the agent disburses that interest to each participant in accordance with the instructions of the participant. Only excess balances may be placed in an excess balance account; the account balance cannot be used to satisfy reserve balance requirements.
Regulation D, Reserve Requirements of Depository Institutions, was amended to authorize the establishment of excess balance accounts, effective July 2, 2009. For more information, read the Federal Reserve Board press release (Off-site Link) and Federal Register notice (Off-site Link).
Please contact your Excess Balance Account District Contact with questions or for assistance with excess balance account setup.
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