February 12, 2016

Federal Reserve announces TDF test operation

For release at 10:00 a.m. EST

The Federal Reserve plans to continue its previously announced periodic testing of the Term Deposit Facility (TDF) with one operation in February. These operations are aimed at ensuring the operational readiness of the TDF and providing eligible institutions with an opportunity to maintain familiarity with term deposit procedures. The TDF test operations are a matter of prudent planning and have no implications for the near-term conduct of monetary policy.

One operation will be conducted on February 18, 2016, for seven-day term deposits. The operation will offer floating-rate term deposits with the maximum individual award amount set at $5 billion, and the rate set equal to the sum of the interest rate on excess reserves plus a fixed spread of 1 basis point. Term deposits offered in the operation will include an early withdrawal feature and settle on the same day the operation is executed. Complete details will be announced on the day prior to the operation on the Board's website. The Federal Reserve plans to conduct a similar routine TDF test operation each quarter in 2016. The schedule and terms for future test operations will be announced at later dates.

Additional information, including the steps that institutions must complete to be eligible to participate in term deposit operations are available at http://www.frbservices.org/centralbank/term_deposit_facility.html

For media inquiries, call 202-452-2955.

Last Update: February 12, 2016