Reserve Maintenance Period

DEFINITION of 'Reserve Maintenance Period'

The time frame in which banks and other depository institutions must maintain a specified level of funds. It is a two-week period that begins on a Thursday and ends on a Wednesday. An assessment of overdrafts and corresponding charges also occurs during this time period.

BREAKING DOWN 'Reserve Maintenance Period'

As the specified amount of reserve funds changes regularly, it is important for the institution to have an account at a reserve bank or a subsequent pass-through arrangement, in order to ensure that the appropriate funds are available. If niether of the two external funds are in place, and the institution does not have enough reserves to meet the requirement, they will be subject to a charge.

RELATED TERMS
  1. Overdraft Protection

    A line of credit that banks offer to their customers to cover ...
  2. Overdraft

    An extension of credit from a lending institution when an account ...
  3. Federal Funds Rate

    The interest rate at which a depository institution lends funds ...
  4. Reserve Ratio

    The portion (expressed as a percent) of depositors' balances ...
  5. Authorized Settlement Agent

    A bank that is authorized to submit checks and other cash items ...
  6. Cost Of Funds

    The interest rate paid by financial institutions for the funds ...
Related Articles
  1. Markets

    What Do the Federal Reserve Banks Do?

    These 12 regional banks are involved with four general tasks: formulate monetary policy, supervise financial institutions, facilitate government policy and provide payment services.
  2. Markets

    Overdrafting

    An overdraft occurs when money is withdrawn from a bank account in an amount that exceeds the funds available in the account. Banks often permit this as a form of short-term loan to the account ...
  3. Personal Finance

    What's The Difference Between Overdraft And Cash Credit?

    Overdraft and cash credit are forms of borrowing. With both, the lending institution lets the borrower withdraw funds she has no claim to, usually in small amounts.
  4. Markets

    How The U.S. Government Formulates Monetary Policy

    Learn about the tools the Fed uses to influence interest rates and general economic conditions.
  5. Personal Finance

    4 Ways to Ditch Bank Overdraft Fees

    At $35 a pop, overdraft fees can mount up quickly. Here are 4 different strategies for avoiding them.
  6. Personal Finance

    Top Checking Accounts With No Overdraft Fees

    Choosing the right checking account could save you hundreds of dollars in fees every year.
  7. Personal Finance

    When Good People Write Bad Checks

    Overdraft protection can help when you overestimate your balance, but it will cost you.
  8. Markets

    Explaining the Federal Discount Rate

    The federal discount rate is the rate at which eligible banks or other depository institutions can borrow funds from a Federal Reserve bank.
  9. Markets

    What's the Federal Funds Rate?

    The federal funds rate is the interest rate banks charge each other for overnight loans to meet their reserve requirements.
  10. Markets

    What is the Cost of Funds?

    Cost of funds is the interest cost financial institutions pay to use the funds they deploy in their business.
RELATED FAQS
  1. What do banks do to control the bank reserve?

    Understand what the Federal Reserve does in order to expand or contract the economy. Learn what depository institutions can ... Read Answer >>
  2. What is the difference between overdraft and cash credit?

    Learn about the uses of the terms ''overdraft'' and ''cash credit,'' and how they represent different financial arrangements ... Read Answer >>
  3. What’s the difference between overdraft protection and overdraft settings?

    Learn what overdraft settings are, how they impact your relationship with your bank and how they govern the overdraft protections ... Read Answer >>
  4. What are some examples of overdraft protection?

    Establish overdraft protection plans to ensure that your bills are paid on time. Use overdraft protection carefully to avoid ... Read Answer >>
  5. What are the pros and cons of overdraft protection?

    If you sign up for overdraft protection and link your checking account to your savings account, a credit card or an overdraft ... Read Answer >>
  6. How are bank reserve requirements determined and how does this affect shareholders?

    Learn how bank reserve requirements are determined and how bank reserves affect shareholders through improved bank stability ... Read Answer >>
Hot Definitions
  1. Dove

    An economic policy advisor who promotes monetary policies that involve the maintenance of low interest rates, believing that ...
  2. Cyclical Stock

    An equity security whose price is affected by ups and downs in the overall economy. Cyclical stocks typically relate to companies ...
  3. Front Running

    The unethical practice of a broker trading an equity based on information from the analyst department before his or her clients ...
  4. After-Hours Trading - AHT

    Trading after regular trading hours on the major exchanges. The increasing popularity of electronic communication networks ...
  5. Omnibus Account

    An account between two futures merchants (brokers). It involves the transaction of individual accounts which are combined ...
  6. Weighted Average Life - WAL

    The average number of years for which each dollar of unpaid principal on a loan or mortgage remains outstanding. Once calculated, ...
Trading Center