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Federal Reserve to offer 7-day term deposits on May 17

May 10, 2018 / Source: FRB

Press Release

May 10, 2018

Federal Reserve to offer 7-day term deposits on May 17

For release at 10:00 a.m. EDT

The Federal Reserve plans to continue its previously announced periodic testing of the Term Deposit Facility (TDF) with one operation in May. 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 in the second half of 2018. The schedule and terms for future test operations will be announced at later dates.

On May 17, 2018, 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 $250,000,000. The operation window will be open from 10:30 a.m. EDT to 12:30 p.m. EDT, and awarded deposits will settle the same day the operation is executed.

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