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.

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