Bank Reserve

Filed Under » , ,
Dictionary Says

Definition of 'Bank Reserve'

Bank reserves are the currency deposits which are not lent out to the bank's clients. A small fraction of the total deposits is held internally by the bank or deposited with the central bank. Minimum reserve requirements are established by central banks in order to ensure that the financial institutions will be able to provide clients with cash upon request.
Investopedia Says

Investopedia explains 'Bank Reserve'

The main purpose of holding reserves is to avoid bank runs and generally appear solvent. Central banks place these restrictions on banks, because the banks can earn a much larger return on their capital by lending out money to clients rather than holding cash in their vaults or depositing it with other institutions. Bank reserves decrease during periods of economic expansion and increase during recessions.

Related Definitions

Search results for

'Bank Reserve'

  • The Federal Reserve: The FOMC Rate Meeting | Investopedia

    http://www.investopedia.com/university/thefed/fed4.asp
    ... seller deposits in his or her bank. This check is then credited against
    the bank's reserve requirement. As a result, the bank has a ...

  • The Currency Board: Understanding The Government's Bank

    http://www.investopedia.com/articles/03/051503.asp
    ... (To learn more about central banks, see the article What Are Central Banks?) Tutorial:
    The Federal Reserve An Alternative to the Central Bank? ...

  • How The Federal Reserve Manages Money Supply

    http://www.investopedia.com/articles/08/fight-recession.asp
    ... When the seller deposits it in his or her bank, the bank is automatically
    granted an increased reserve balance with the Fed. Thus ...

  • The Banking System: Federal Reserve System | Investopedia

    http://www.investopedia.com/university/banking-system/banking-system10.asp
    ... The committee includes a seven-member board of governors and five reserve
    bank presidents. While four of these five seats rotate ...

  • The Federal Reserve: Monetary Policy | Investopedia

    http://www.investopedia.com/university/thefed/fed3.asp
    ... Setting the Discount Rate - This is the interest rate that banks pay on
    short-term loans from a Federal Reserve Bank. The discount ...

  • The Federal Reserve: Duties | Investopedia

    http://www.investopedia.com/university/thefed/fed2.asp
    ... Similar to how you have a checking account at your local bank, the US
    Treasury has a checking account with the Federal Reserve. ...

  • How The Federal Reserve Was Formed

    http://www.investopedia.com/articles/economics/08/federal-reserve.asp
    ... The fact that the government owed its economic survival to a private banker forced
    the necessary legislation to create a central bank and the Federal Reserve. ...

  • The Fed's New Tools For Manipulating The Economy

    http://www.investopedia.com/articles/economics/08/monetary-policy-recession.asp
    ... deposit as it is only required to hold $25, or 5%. If the reserve ratio is increased,
    the bank is left with less money to lend out on each dollar deposited. ...

  • The Federal Reserve: What Is The Fed? | Investopedia

    http://www.investopedia.com/university/thefed/fed1.asp
    ... The voting members of the FOMC are the seven members of the Board of Governors,
    the president of the Federal Reserve Bank of New York and presidents of four ...

  • The Treasury And The Federal Reserve

    http://www.investopedia.com/articles/economics/08/treasury-fed-reserve.asp
    ... The Federal Reserve The Federal Reserve System was established in 1913. It serves
    as the central bank of the US, with a mandate to "keep our money valuable and ...

Related Articles

Bank Rates
Product Today Last Wk
$10K MMA 0.50% 0.51%
MMA 0.45% 0.46%
6 Month CD 0.46% 0.47%
1 Year CD 0.70% 0.75%
5 Year CD 1.46% 1.46%
1 Year Jumbo CD 0.66% 0.67%
Rate data provided by Bankrate
Product Today Last Wk
$30K HELOC 4.59% 4.60%
$30K Home Equity Loan 5.74% 5.77%
$50K Home Equity Loan 5.45% 5.50%
$50K HELOC 4.24% 4.24%
$100K Home Equity Loan 5.41% 5.46%
$100K HELOC 4.13% 4.13%
Rate data provided by Bankrate
Product Today Last Wk
30 Year Fixed 3.80% 3.80%
15 Year Fixed 3.09% 3.11%
1 Year ARM 3.54% 3.53%
30 Year Fixed Jumbo 4.38% 4.38%
5/1 ARM 2.65% 2.69%
3/1 ARM 2.69% 2.69%
Rate data provided by Bankrate
Product Today Last Wk
60 Month Used Car Loan 4.51% 4.51%
48 Month Used Car Loan 4.35% 4.35%
48 Month New Car Loan 3.24% 3.24%
36 Month Used Car Loan 4.34% 4.36%
36 Month New Car Loan 3.11% 3.13%
60 Month New Car Loan 3.35% 3.34%
Rate data provided by Bankrate
Partner Links