October 16, 2014
Federal Reserve offers seven-day term deposits through its Term Deposit Facility
For release at 12:00 p.m. EDT
On October 20, 2014, the Federal Reserve will conduct a fixed-rate offering of term deposits through its Term Deposit Facility (TDF) that will incorporate an early withdrawal feature. This feature will allow depository institutions to obtain a return of funds prior to the maturity date subject to an early withdrawal penalty. The Federal Reserve will offer seven-day term deposits with an interest rate of 0.26000 percent and a maximum tender amount of $10,000,000,000.
Description of Operation and Tender Parameters
|TDF Operation ID:||F48|
|Early withdrawal feature included:||Yes|
|Penalty rate for early withdrawal:||0.75000%|
|Operation Date:||Monday, October 20, 2014|
|Opening Time:||10:00 a.m. ET|
|Closing Time:||2:00 p.m. ET|
|Notification Date (summary results):||Tuesday, October 21, 2014|
|Settlement Date:||Thursday, October 23, 2014|
|Maturity Date:||Thursday, October 30, 2014|
|Maximum Number of Tenders:||1|
|Minimum Tender Amount:||$10,000|
|Maximum Tender Amount (per institution):||$10,000,000,000|
|Award Minimum Amount:||$10,000|
|Award Maximum Amount:||$10,000,000,000|
Submission of Tender
Participants must submit tenders by accessing the Term Deposit Facility application (https://www.federalreserve.org/arrow/ARROWWeb/home.do) between the opening time and the closing time on the operation date.
All tenders that are complete and compliant with the operation parameters listed above will be automatically awarded in full.
The penalty for obtaining a return of funds prior to the maturity date includes the forfeiture of all interest on the term deposit plus an additional fee of 0.75000 percent at an annual rate applied to the principal over the entire term of the deposit. Requests for early withdrawal must be made between 10:00 a.m. ET and 12:00 p.m. ET.
See the TDF Resource Center for additional details regarding this feature and the terms and conditions for early withdrawal (www.frbservices.org/centralbank/term_deposit_facility.html).
Participants will be able to view their awards by accessing the Term Deposit Facility application.
Summary operation results will be published on the Board of Governors' website (http://www.federalreserve.gov/monetarypolicy/tdf.htm) at approximately 12:00 p.m. ET on the notification date.
As noted in the Federal Reserve Board's September 4, 2014, release, this operation is part of the continuing program of operational testing of policy tools designed to provide eligible institutions with an opportunity to gain familiarity with term deposit operations. The operation will be conducted as specified in this announcement, Regulation D, and the terms and conditions of the Term Deposit Facility (http://www.frbservices.org/centralbank/term_deposit_facility.html).
For media inquiries, call 202-452-2955.