General Information


Last Updated: 06.07.2024         

Reserve Banks normally extend credit in the form of an advance secured by acceptable collateral. A depository institution that wants to borrow must have on file with its Reserve Bank the necessary authorizing resolutions and agreements, as described in Operating Circular No. 10. A request for an advance may be made only by an authorized person, as noted in the borrowing resolutions and identified on a current list of authorized individuals or signature card. All Discount Window loans must be secured by collateral acceptable to the lending Reserve Bank.

Requesting a Discount Window Loan (Advance)

There are two ways to request an advance: Use Discount Window Direct (DWD), a self-service application; or call your local Reserve Bank.

Please be prepared to supply the following information when requesting an advance:

  • Name and location (city and state) of the depository institution.
  • The depository institution's ABA and telephone numbers.
  • Your name and title. If the depository institution's borrowing resolution requires that two people request a Discount Window loan, please have a second authorized individual available.
  • The amount you are requesting.
  • The maturity date of the loan.
    • Primary credit can be extended for periods as long as 90 days. 
    • Secondary credit is typically extended on an overnight basis.

Discount Window staff may request additional information, particularly when the request is for secondary credit.


Common Forms of Collateral

Assets accepted as collateral can be found on the Collateral Eligibility page. Collateral is assigned a lendable value (market or an internally-modelled fair market value estimate multiplied by a margin) deemed appropriate by the Reserve Bank. The current collateral margins tables can be found on the Collateral Valuation page. The financial condition of a depository institution may be considered when assigning values.

The following assets are most commonly pledged to secure Discount Window advances:

  • Commercial, industrial, or agricultural loans
  • Consumer loans
  • Residential and commercial real estate loans
  • Corporate bonds and money market instruments
  • Obligations of U.S. government agencies and government sponsored enterprises
  • Asset-backed securities
  • Collateralized mortgage obligations
  • U.S. Treasury obligations
  • State or political subdivision obligations

Reserve Bank staff can offer guidance on other types of collateral that may be acceptable. The Federal Reserve recommends that depository institutions pledge collateral to the Discount Window before a need to borrow arises. In general, it is not operationally feasible to pledge collateral (other than book-entry securities issued by the U.S. Treasury, U.S. government agencies, or U.S. government sponsored enterprises) on the day a loan is requested.


Loan Proceeds and Repayments

An advance is issued with a stated maturity date. Proceeds are posted to the agreed-upon account (usually the borrowing depository institution's account or its correspondent's account), normally after the close of Fedwire. Discount Window loans must be repaid on the maturity date or, at the lending Reserve Bank's discretion, upon demand. Repayment of principal and accrued interest is charged to the account to which the loan was posted. Multi-day advances, however, can be prepaid in whole or in part at the borrowing depository institution's option.

Please be prepared to supply the following information to a Discount Window representative when prepaying an advance via DWD or by calling your local Reserve Bank:

  • Name and location (city and state) of the depository institution
  • Depository institution's ABA
  • Authorized borrower(s’) name(s), title(s), and contact number(s)
  • Amount of prepayment being requested.

Prepayment amounts will be applied sequentially to the loans that have been outstanding the longest.


Interest on Discount Window Advances

Interest on an advance is due and payable to the lending Reserve Bank at maturity or when repayment of principal on the advance is requested. Interest will be charged at the applicable rate in effect at the time the advance is made. However, if the interest rate stated is changed while an advance is still outstanding, the new rate will apply on and after the effective date of the change.

Interest accrues on the unpaid balance of an advance until the maturity date, at which time the remaining principal and any accrued interest will be automatically charged to the borrowing depository institution's account or the designated correspondent's account.

Interest on advances is charged for 24 hours (or a multiple thereof, for multi-day loans) on the basis of a 365 day year.