November 06, 2014

Federal Reserve offers seven-day term deposits through its Term Deposit Facility

For release at 12:00 p.m. EST

On November 10, 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 0.27000 percent and a maximum tender amount of $20,000,000,000.

Regarding the operations that will be conducted on November 17, 2014, and November 24, 2014, the terms will be set to avoid settlement or maturity falling on a federal holiday. On November 17, 2014, the Federal Reserve will offer six-day term deposits that will settle on Thursday, November 20, 2014, and mature on Wednesday, November 26, 2014. On November 24, 2014, the Federal Reserve will offer eight-day term deposits that will settle on Wednesday, November 26, 2014, and mature on Thursday, December 4, 2014. Additional details for these operations, including the maximum award amount, rate offered, early withdrawal penalty, and other terms, will be announced nearer to the time of the operations on the Board's website.

Description of Operation and Tender Parameters for November 10 TDF Operation

TDF Operation ID: F51
Operation Format: Fixed-Rate
Term:   Seven-Day
Interest Rate:  0.27000%
Early withdrawal feature included: Yes
Penalty rate for early withdrawal: 0.75000%
Operation Date: Monday, November 10, 2014
Opening Time: 10:00 a.m. ET
Closing Time: 2:00 p.m. ET
Notification Date (summary results): Wednesday, November 12, 2014
Settlement Date: Thursday, November 13, 2014
Maturity Date: Thursday, November 20, 2014
Tender Parameters  
Maximum Number of Tenders: 1
Minimum Tender Amount: $10,000
Tender Increment:       $10,000
Maximum Tender Amount (per institution): $20,000,000,000
Award Minimum Amount: $10,000
Award Maximum Amount:    $20,000,000,000

Submission of Tender
Participants must submit tenders by accessing the Term Deposit Facility application ( ) 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.

Early Withdrawal
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 ( ).

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 ( 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 ( ).

For media inquiries, call 202-452-2955.

Last Update: November 06, 2014