Last Updated: 12.01.2025

Seasonal Credit is a lending program available to smaller depository institutions with demonstrated liquidity pressures of a seasonal nature. The program is generally available to depository institutions that can demonstrate a clear pattern of recurring intra-yearly fluctuations in deposits and loans caused by seasonal types of business such as, but not limited to, construction, college, farming, resort, and municipal financing. Eligible depository institutions may qualify for term funding up to nine months in order to meet their seasonal funding needs.

Depository institutions must meet the following requirements to qualify for the seasonal credit program:

• Be in satisfactory financial condition in the judgment of the lending Federal Reserve Bank (Reserve Bank);
• Have deposits of less than $500 million;
• Demonstrate a pattern of recurring seasonal need for funds that persists for at least one month; and
• Have executed and delivered Operating Circular No. 10 (OC-10) agreements.

Advances accrue interest at a floating rate that is consistent with market rates. Current rates can be found on the Discount Rates page. There are no commitment fees, stock purchase requirements, prepayment penalties, or other expenses or penalties involved in setting up and maintaining access. Credit may be drawn down incrementally as needed, and partial and full prepayments are allowed without penalty.

Depository institutions that utilize the seasonal credit program are responsible for a portion of their seasonal funding from their own liquidity resources. The size of a depository institution’s seasonal credit line is limited to the amount of its estimated funding needs, reduced by a deductible amount calculated by the Reserve Bank. Depository institutions are not permitted to use seasonal credit advances to increase sales of federal funds or to purchase other assets. However, net sales of federal funds are appropriate, as long as they are consistent with the institution's normal operating pattern. The maximum levels of net fed funds sales and investments allowed while borrowing under the program are established during the application process described below.

Depository institutions that anticipate a possible need for seasonal credit are encouraged to contact their local Reserve Bank to complete their application and establish access to seasonal credit before the need to borrow arises. As part of the application process, the depository institution must provide up to three years of monthly loan and deposit data. After receiving the completed application, the Reserve Bank will determine whether the depository institution is eligible to participate in the seasonal credit program, as well as the amount and duration of the approved seasonal credit line. Depository institutions must re-apply for the program annually.

Terms and Features

The interest rate charged on seasonal credit loans is a floating market rate comprised of the average of the federal funds rate and the rate on three-month CDs rounded to the nearest five basis points. The interest rate is reset on the first business day of each two-week reserve maintenance period to reflect movements in market interest rates over the previous maintenance period and applies to all outstanding seasonal credit loans.