February 17, 2016
Federal Reserve offers seven-day term deposits through its Term Deposit Facility
For release at 3:00 p.m. EST
On February 18, 2016, 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 seven-day term deposits with a rate set equal to the sum of the interest rate paid on excess reserves plus a fixed spread of 1 basis point. The maximum tender amount per institution will be $5,000,000,000. 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:||F63|
|Reference Rate:||Interest rate paid on excess reserves (IOER)|
|Early Withdrawal Feature Included:||Yes|
|Penalty Rate for Early Withdrawal:||0.75000%|
|Operation Date:||Thursday, February 18, 2016|
|Opening Time:||10:30 a.m. ET|
|Closing Time:||12:30 p.m. ET|
|Notification Date (summary results):||Thursday, February 18, 2016|
|Settlement Date:||Thursday, February 18, 2016|
|Maturity Date:||Thursday, February 25, 2016|
|Maximum Number of Tenders:||1|
|Minimum Tender Amount:||$10,000|
|Maximum Tender Amount (per institution):||$5,000,000,000|
|Award Minimum Amount:||$10,000|
|Award Maximum Amount:||$5,000,000,000|
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 3:30 p.m. ET on the notification date.
As noted in the Federal Reserve Board's February 12, 2016, release, this operation is part of the continuing program of operational testing of policy tools designed to provide institutions with an opportunity to maintain 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.