Fed Publishes Final Amendment To Interest Paid On Reg D Reserves

WASHINGTON—The Federal Reserve has published a final amendment to the rate of interest paid on Regulation D reserves to conform to the recent increase in the federal funds target rate.
The Fed announced the change when the Federal Open Market Committee last Wednesday announced an increase of a quarter point for the federal funds target rate, which had been set at 0 to 0.25% since 2008, NAFCU explained.
The Fed said that both the rate of interest paid on balances maintained to satisfy reserve balance and the rate of interest paid on excess balances maintained at Federal Reserve Banks will now be 0.50%, 0.25 percentage points higher than their previous levels. Credit unions and other depository institutions that maintain Reg D reserves may receive interest earnings from the Fed at least once a quarter.