Reserve Requirements

As announced on March 15, 2020, the Board reduced reserve requirement ratios to zero percent effective March 26, 2020. This action eliminated reserve requirements for all depository institutions.

The following content explains the Board’s authority to impose reserve requirements and how reserve requirements were administered prior to the change in reserve requirement ratios to zero.

The Federal Reserve Act authorizes the Board to establish reserve requirements within specified ranges for purposes of implementing monetary policy on certain types of deposits and other liabilities of depository institutions.

The dollar amount of a depository institution's reserve requirement is determined by applying the reserve requirement ratios specified in the Board's Regulation D (Reserve Requirements of Depository Institutions, 12 CFR Part 204) to an institution's reservable liabilities (see table of reserve requirements). The Federal Reserve Act authorizes the Board to impose reserve requirements on transaction accounts, nonpersonal time deposits, and Eurocurrency liabilities.

Prior to the change effective March 26, 2020, reserve requirement ratios on net transactions accounts differed based on the amount of net transactions accounts at the depository institution. A certain amount of net transaction accounts, known as the "reserve requirement exemption amount," was subject to a reserve requirement ratio of zero percent. Net transaction account balances above the reserve requirement exemption amount and up to a specified amount, known as the "low reserve tranche," were subject to a reserve requirement ratio of 3 percent. Net transaction account balances above the low reserve tranche were subject to a reserve requirement ratio of 10 percent. The reserve requirement exemption amount and the low reserve tranche are indexed each year pursuant to formulas specified in the Federal Reserve Act (see table of low reserve tranche amounts and exemption amounts since 1982).

For more history on the changes in reserve requirement ratios and the indexation of the exemption and low reserve tranche, see the annual review table. Additional details on reserve requirements can be found in the Reserve Maintenance Manual and in the article (119 KB PDF) in the Federal Reserve Bulletin, the appendix of which has tables of historical reserve ratios.

Reserve Requirements

Liability Type Requirement % of liabilities Effective date Net transaction accounts 1 $0 to $16.9 million2 0 1-16-20 More than $16.9 million to $127.5 million3 0 3-26-20 More than $127.5 million 0 3-26-20 Nonpersonal time deposits 0 12-27-90 Eurocurrency liabilities 0 12-27-90

Return to text

Low Reserve Tranche Amounts and Exemption Amounts since 1982

Effective date

(beginning of maintenance period) Low reserve tranche amount

(millions of U.S. dollars) Exemption amount

(millions of U.S. dollars) January 14, 1982 26.0 n.a. December 23, 1982 n.a. 2.1 January 13, 1983 26.3 *** January 12, 1984 28.9 2.2 January 3, 1985 29.8 2.4 January 2, 1986 31.7 2.6 January 1, 1987 36.7 2.9 December 31, 1987 40.5 3.2 December 29, 1988 41.5 3.4 December 28, 1989 40.4 3.4 December 27, 1990 41.1 3.4 December 26, 1991 42.2 3.6 December 24, 1992 46.8 3.8 December 23, 1993 51.9 4.0 December 22, 1994 54.0 4.2 December 21, 1995 52.0 4.3 December 31, 1996 49.3 4.4 January 1, 1998 47.8 4.7 December 31, 1998 46.5 4.9 December 30, 1999 44.3 5.0 December 28, 2000 42.8 5.5 December 27, 2001 41.3 5.7 December 26, 2002 42.1 6.0 December 25, 2003 45.4 6.6 December 23, 2004 47.6 7.0 December 22, 2005 48.3 7.8 December 21, 2006 45.8 8.5 December 20, 2007 43.9 9.3 January 1, 2009 44.4 10.3 December 31, 2009 55.2 10.7 December 30, 2010 58.8 10.7 December 29, 2011 71.0 11.5 December 27, 2012 79.5 12.4 January 23, 2014 89.0 13.3 January 22, 2015 103.6 14.5 January 21, 2016 110.2 15.2 January 19, 2017 115.1 15.5 January 18, 2018 122.3 16.0 January 17, 2019 124.2 16.3 January 16, 2020 127.5 16.9

Return to text

Regulatory Changes in Reserve Requirements and Indexation of the Low Reserve Tranche and the Reserve Requirement Exemption