February 18, 2015

Federal Reserve offers 21-day term deposits through its Term Deposit Facility

For release at 3:00 p.m. EST

On February 19, 2015, the Federal Reserve will conduct a floating-rate offering of term deposits with an early withdrawal feature through its Term Deposit Facility (TDF). The Federal Reserve will offer 21-day term deposits with a rate set equal to the sum of the interest rate paid on excess reserves (currently 25 basis points) plus a fixed spread of 3 basis points. The maximum tender amount per institution will be $20,000,000,000. The operation window will be open from 10:30 a.m. ET to 12:30 p.m. ET, and awarded deposits will settle the same day the operation is executed.

Description of Operation and Tender Parameters

TDF Operation ID: F57
Operation Format: Floating-Rate
Term: 21-Day
Reference Rate: Interest rate paid on excess reserves (IOER)
Spread: 0.03000%
Early Withdrawal Feature Included: Yes
Penalty Rate for Early Withdrawal: 0.75000%
Operation Date: Thursday, February 19, 2015
Opening Time: 10:30 a.m. ET
Closing Time: 12:30 p.m. ET
Notification Date (summary results): Thursday, February 19, 2015
Settlement Date: Thursday, February 19, 2015
Maturity Date: Thursday, March 12, 2015
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 (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.

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 (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 3:30 p.m. ET on the notification date.

As noted in the Federal Reserve Board's February 2, 2015, release, this operation is part of the continuing program of operational testing of policy tools designed to provide 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.

Last Update: February 18, 2015