Frequently Asked Questions

Payment System Risk

Last Updated: March 24, 2011

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  1. What is a daylight overdraft?
  2. May all institutions that have a Federal Reserve account incur daylight overdrafts?
  3. Are there limits to daylight overdrafts an institution can incur in its Federal Reserve account?
  4. What is a cap breach?
  5. How are daylight overdrafts monitored?
  6. What are the Federal Reserve's expectations regarding account management?
  7. What are the most recent revisions to the PSR policy?
  8. Are institutions required to collateralize daylight overdrafts?
  9. Collateral

  10. What is the purpose of collateral under the PSR policy?
  11. Are there separate accounts for discount window and PSR collateral at the Federal Reserve?
  12. What type of collateral is acceptable for PSR purposes?
  13. Do collateral margins for PSR purposes differ from those for the discount window?
  14. What steps should institutions take to ensure collateral already pledged for discount window purposes is applied toward daylight overdraft purposes?
  15. What steps should institutions take to pledge collateral for daylight overdraft purposes, if collateral is not already pledged?
  16. How can institutions monitor collateral applied for daylight overdraft purposes?
  17. Net Debit Caps

  18. Are there limits on intraday credit even when the credit is fully collateralized?
  19. How is a net debit cap calculated?
  20. Does the amount of collateral pledged increase an institution's net debit cap?
  21. What is a max cap?
  22. What is a streamlined max cap procedure for eligible foreign banking organizations (FBOs)?
  23. Are fully collateralized daylight overdrafts in excess of a net debit cap considered a violation of the PSR Policy?
  24. How can institutions monitor their daylight overdraft position and charges?
  25. Pricing/Fees

  26. How are institutions charged for daylight overdrafts?
  27. How are daylight overdraft fees calculated for institutions with regular access to the discount window?
  28. How are daylight overdraft fees calculated for institutions without regular access to the discount window?
  29. What is a fee waiver?
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Current Interest Rates
Primary Credit 0.75%
Secondary Credit 1.25%
Seasonal Credit 0.15%
Fed Funds Target 0 - 0.25%