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Board of Governors of the Federal Reserve System
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Reserve Maintenance Manual

Account Structure

The Federal Reserve has established an account structure that centralizes the account relationship between a depository institution and a Federal Reserve Bank through a single master account. The management of an institution's master account is centralized with one Reserve Bank, and the use of optional subaccounts provides an institution with flexibility to segregate its account information.

Master Accounts

Each separately chartered institution may have one master account at a designated Reserve Bank, with three exceptions (see Exceptions to One Master Account Rule). The master account is both a record of financial transactions that reflects the financial rights and obligations of an account holder and of the Reserve Bank with respect to each other, and the place where opening and closing balances are determined. For each institution, all credits and debits resulting from the use of Federal Reserve services at any Federal Reserve office are booked to this single master account at one Reserve Bank. All overnight and daylight credit is disbursed and repaid through this account, and the Reserve Bank holding the account manages the credit risk posed by the institution's use of Federal Reserve services.

Reserve administration is also managed through this account, unless an institution has entered into a pass-through agreement with a correspondent. All end-of-day balances maintained in a master account during the reserve maintenance period are used by the institution to satisfy its reserve balance requirement. Funds that an institution deposits in a term deposit with the Federal Reserve cannot be used to satisfy its reserve balance requirement. For information on term deposits, please visit the Term Deposit Facility Resource Center Leaving the Board on the Federal Reserve Bank Services website.

If an institution is not required to maintain balances to satisfy a reserve requirement, it may still establish a master account with a Reserve Bank and earn interest on reserve balances at the interest rate paid on excess balances, provided the institution is eligible to receive interest payments. (See Interest on Reserve Balances.)

Exceptions to One Master Account Rule

The following are the exceptions to the rule that each separately chartered institution may have only one master account:

  • Merger participants. Multiple accounts are permitted under certain circumstances during a transition period following a merger (see Effect of Mergers on Reserve Balance Requirements).
  • Foreign-related institutions. U.S. branches and agencies of the same foreign bank and banking Edge and agreement corporations will have, at most, a single master account for each group of offices located in the same state and same District.
  • Excess balance account. An excess balance account is a limited-purpose master account under the direction of an agent through which participants may hold excess balances at the agent's Reserve Bank.


From a depository institution's perspective, the account structure provides a single account management relationship with the Federal Reserve, while supporting access to Federal Reserve financial services from any location. The account structure replicates the features and flexibility of a multiple account structure through the use of subaccounts in which information on financial services can be segregated. Subaccounts are information subsets and can be organized to meet varying informational needs presented by different organizational structures. While they do not show balances, subaccounts provide totals for debit and credit activity.

Where the Master Account is Located

An institution's master account is held at the Reserve Bank in the District where the institution is located. In general, the Federal Reserve considers a depository institution to be "located" where specified in its charter, organizing certificate license, or articles of incorporation, or as specified by its primary regulator, or if no such location is specified, where its head office is located unless otherwise determined by the Federal Reserve Board. If an institution's location is uncertain or would impede the Federal Reserve Board's or the Reserve Bank's performance of their statutory functions or the ability of the depository institution to operate efficiently, the Federal Reserve Board, after consultation with the relevant Reserve Banks, may designate another location for account and membership purposes. If location in a particular District will impede an institution's operational efficiency, the institution may request determination of a different location.

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Last update: November 25, 2013