Board of Governors of the Federal Reserve System

As part of the continuing program of operational testing of its policy tools, the Federal Reserve plans to conduct a series of eight consecutive operations offering seven-day term deposits through its Term Deposit Facility (TDF). Individual operations will be held on the first business day of each week beginning the week of May 19, 2014.

The Federal Reserve currently anticipates that over the first four operations, the maximum award amount will be increased gradually to an amount not to exceed $10 billion; the interest rate paid on these initial four operations will be maintained at 26 basis points. Over the subsequent four operations, the Federal Reserve expects to increase the interest rate paid in small steps to a level not to exceed 30 basis points. Details for each of the weekly operations, including the maximum award amount, rate offered, and other terms, will be announced nearer to the time of each operation on the Board of Governors' website.

These operations are designed to ensure the operational readiness of the TDF and to provide eligible institutions with an opportunity to gain familiarity with term deposit procedures. The development of the TDF and the ongoing TDF test operations are a matter of prudent planning and have no implications for the near-term conduct of monetary policy.

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 .

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