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Federal Reserve to offer seven-day term deposits on February 23

February 16, 2017 / Source: FRB

Press Release

Release Date: February 16, 2017

For release at 10:00 a.m. EST

The Federal Reserve plans to continue its previously announced periodic testing of the Term Deposit Facility (TDF) with one operation in February. These operations are aimed at ensuring the operational readiness of the TDF and providing eligible institutions with an opportunity to maintain familiarity with term deposit procedures. The TDF test operations are a matter of prudent planning and have no implications for the near-term conduct of monetary policy. The Federal Reserve plans to conduct a similar routine TDF test operation each quarter in 2017. The schedule and terms for future test operations will be announced at later dates.

On February 23, 2017, the Federal Reserve will conduct a floating-rate offering of term deposits with an early withdrawal feature through its TDF. The Federal Reserve will offer seven-day term deposits with a rate set equal to the sum of the interest rate paid on excess reserves plus a fixed spread of 1 basis point. The maximum tender amount per institution will be $1,000,000,000. The operation window will be open from 10:30 a.m. EST to 12:30 p.m. EST, and awarded deposits will settle the same day the operation is executed.

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