Retail Repurchase Agreement

DEFINITION of 'Retail Repurchase Agreement'

An alternative to regular savings deposits. Under a retail repurchase agreement, an investor buys a pool of securities in aggregate denominations of less than $100,000 for a term of less than 90 days. The agreement is not automatically renewable.

Also known as a "retail repo."

BREAKING DOWN 'Retail Repurchase Agreement'

Unlike regular savings deposits, retail repurchase agreements are not insured by the Federal Deposit Insurance Corporation, are not guaranteed, and may lose value. They are classified as securities transactions and, as such, are subject to default risk.

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RELATED FAQS
  1. Under what circumstances would someone enter into a repurchase agreement?

    Learn when investors want to enter into a repurchase agreement, such as to gain quick access to liquidity and enjoy flexibility ... Read Answer >>
  2. What is the difference between a repurchase agreement and reverse repurchase agreement?

    Learn how a repurchase agreement is a form of collateralized lending and a reverse repurchase agreement is a form of collateralized ... Read Answer >>
  3. What tax implications are there for parties involved with a reverse repurchase agreement?

    Learn about the tax consequences that the buyer can face as a result of a reverse repurchase agreement ("reverse repo") with ... Read Answer >>
  4. What risks does the dealer (lender) in a reverse repurchase agreement take on?

    Read about the lender risks of participating in reverse repurchase agreements or for dealers who use the Fed's overnight ... Read Answer >>
  5. What is the difference between a term and open repurchase agreement?

    Learn about the main difference between a term and open repurchase agreement, including when each is used and how the interest ... Read Answer >>
  6. What is the primary use of reverse repurchase agreements?

    Discover how the Federal Reserve utilizes reverse purchase agreements for the primary purpose of offsetting temporary shifts ... Read Answer >>
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