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Aug 4, 2016

FRB Press Release - August 4, 2016: Federal Reserve to offer seven-day term deposits through its Term Deposit Facility on August 11

Press Release

Release Date: August 4, 2016

The Federal Reserve plans to continue its previously announced periodic testing of the Term Deposit Facility (TDF) with one operation in August. 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. 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.
On August 11, 2016, the Federal Reserve will conduct a floating-rate offering of term deposits with an early withdrawal feature through its 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. EDT to 12:30 p.m. EDT, and awarded deposits will settle the same day the operation is executed.

Description of Operation and Tender Parameters
TDF Operation ID:F65
Operation Format:Floating-Rate
Reference Rate:Interest rate paid on excess reserves (IOER)
Early Withdrawal Feature Included:Yes
Penalty Rate for Early Withdrawal:0.75000%
Operation Date:Thursday, August 11, 2016
Opening Time:10:30 a.m. EDT
Closing Time:12:30 p.m. EDT
Notification Date (summary results):Thursday, August 11, 2016
Settlement Date:Thursday, August 11, 2016
Maturity Date:Thursday, August 18, 2016
Tender Parameters
Maximum Number of Tenders:1
Minimum Tender Amount:$10,000
Tender Increment:$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 ( Leaving the Board) 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. EDT and 12:00 p.m. EDT.
See the TDF Resource Center for additional details regarding this feature and the terms and conditions for early withdrawal ( Leaving the Board).
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 3:30 p.m. EDT on the notification date.
The operation will be conducted as specified in this announcement, Regulation D, and the terms and conditions of the Term Deposit Facility ( Leaving the Board).
Additional information, including the steps that institutions must complete to be eligible to participate in term deposit operations are available at Leaving the Board.
For media inquiries, call 202-452-2955.

Last update: August 4, 2016