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Fed announces annual reserves exemption amount

The Federal Reserve Board has announced the annual indexing of the reserve requirement exemption amount and the low reserve tranche. These amounts are used in the calculation of reserve requirements for depository institutions. The Board also announced the annual indexing of nonexempt deposit cutoff and the reduced reporting limit.

For net transaction accounts in 2020, the first $16.9 million, up from $16.3 million in 2019, will be exempt from reserve requirements. A 3 percent reserve ratio will be assessed on net transaction accounts over $16.9 million up to and including $127.5 million, up from $124.2 million in 2019. A 10 percent reserve ratio will be assessed on net transaction accounts in excess of $127.5 million.

The new low reserve tranche and reserve requirement exemption amount will apply to the 14-day reserve maintenance period that begins January 16, 2020. For depository institutions that report deposit data weekly, this maintenance period aligns with the 14-day computation period that begins Tuesday, December 17, 2019. For depository institutions that report deposit data quarterly, this maintenance period aligns with the seven-day computation period that begins Tuesday, December 17, 2019.

Related to the annual indexing of reserve requirements is the Fed's update of its Reserve Maintenance Manual, which provides information regarding reserve calculations and account maintenance for depository institutions that file the Federal Reserve (FR) 2900 form (Report of Transaction Accounts, Other Deposits and Vault Cash) with the Federal Reserve, either weekly or quarterly. The November 2019 edition of the manual is now available.

  • [Editor's Note: The table appearing in the Board's Federal Register submission document is missing the row with the reserve requirement for net transaction accounts in excess of $127.5 million. We have contacted the Federal Reserve Board staff to call the omission to their attention. We determined that the reserve amount on the missing line should be $3,318,000 plus 10% of the amount over $127.5 million.]
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