The Discount Window and Discount Rate

The Discount Window

Federal Reserve lending to depository institutions (the "discount window") plays an important role in supporting the liquidity and stability of the banking system and the effective implementation of monetary policy. By providing ready access to funding, the discount window helps depository institutions manage their liquidity risks efficiently and avoid actions that have negative consequences for their customers, such as withdrawing credit during times of market stress. Thus, the discount window supports the smooth flow of credit to households and businesses.

On March 15, the Board announced changes to the discount window. These changes included the following:

  • Narrowing the spread of the primary credit rate relative to the general level of overnight interest rates to help encourage more active use of the window by depository institutions to meet unexpected funding needs.
  • Announcing that depository institutions may borrow from the discount window for periods as long as 90 days, prepayable and renewable by the borrower on a daily basis.

These changes are effective March 16, and will remain in effect until the Board announces otherwise. The press release announcing these changes can be found here.

The Discount Rate

The discount rate is the interest rate charged to commercial banks and other depository institutions on loans they receive from their regional Federal Reserve Bank's lending facility—the discount window. The Federal Reserve Banks offer three types of credit to depository institutions: primary credit, secondary credit, and seasonal credit, each with its own interest rate. All discount window loans are fully secured.

The discount rate on secondary credit is higher than the rate on primary credit. The rate for seasonal credit is an average of selected market rates. Rates are established by each Reserve Bank's board of directors, subject to the review and determination of the Board of Governors of the Federal Reserve System. The rates for the three lending programs are the same across all Reserve Banks.

Further information on the discount window, including interest rates, is available from the Federal Reserve System's discount window web site.

Minutes of the Board of Governors discount rate meetings

May 17 through June 16, 2021 (PDF)

April 5 through April 28, 2021 (PDF)

February 8 through March 17, 2021 (PDF)

January 19 and January 27, 2021 (PDF)

November 16 through December 16, 2020 (PDF)

October 5 through November 5, 2020 (PDF)

August 24 through September 16, 2020 (PDF)

June 22 through July 29, 2020 (PDF)

May 18 through June 10, 2020 (PDF)

April 29, 2020 (PDF)

February 10 through March 15, 2020 (PDF)

January 21 and January 29, 2020 (PDF)

November 4 and December 11, 2019 (PDF)

October 7 through October 30, 2019 (PDF)

August 26 and September 18, 2019 (PDF)

July 1 through July 31, 2019 (PDF)

June 19, 2019 (PDF)

April 22 and May 1, 2019 (PDF)

February 25 through March 20, 2019 (PDF)

January 22 and January 30, 2019, 2019 (PDF)

December 10 and 19, 2018 (PDF)

November 8, 2018 (PDF)

August 27 through September 26, 2018 (PDF)

July 9 through August 1, 2018 (PDF)

June 4 and June 13, 2018 (PDF)

April 23 and May 2, 2018 (PDF)

February 26 through March 21, 2018 (PDF)

January 22 and January 31, 2018 (PDF)

December 4 and December 13, 2017 (PDF)

October 10 through November 1, 2017 (PDF)

August 28 and September 20, 2017 (PDF)

July 17 and July 26, 2017 (PDF)

June 5 and June 14, 2017 (PDF)

March 27 through May 3, 2017 (PDF)

February 13 through March 15, 2017 (PDF)

January 23 and February 1, 2017 (PDF)

November 14 through December 14, 2016 (PDF)

October 11 and October 31, 2016 (PDF)

August 29 and September 19, 2016 (PDF)

July 25, 2016 (PDF)

May 23 and June 13, 2016 (PDF)

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Last Update: July 13, 2021