DEFINITION of 'Term Repurchase Agreement'

Under a term repurchase agreement, a bank will agree to buy securities from a dealer and then resell them a short time later at a preset price. The difference between the purchase and sale prices represents the interest paid for the agreement. Term repurchase agreements are used as a short-term cash-investment alternative.

BREAKING DOWN 'Term Repurchase Agreement'

Banks and other savings institutions that are holding excess cash quite often employ these instruments, because they have shorter maturities than certificates of deposit. Term repurchase agreements also tend to pay higher interest than overnight repurchase agreements because they carry greater interest-rate risk, since their maturity is greater than one day.

  1. Retail Repurchase Agreement

    An alternative to regular savings deposits. Under a retail repurchase ...
  2. Repurchase Agreement - Repo

    A repurchase agreement is a form of short-term borrowing for ...
  3. Rule 10b-18

    An SEC rule that provides a "safe harbor" for companies and their ...
  4. Credit Agreement

    A credit agreement is a legally binding contract documenting ...
  5. Conditional Sales Agreement

    A lease agreement banks can offer to business customers that ...
  6. Market Standoff Agreement

    An agreement that prevents insiders of a company from selling ...
Related Articles
  1. Investing

    Impact of Share Repurchases

    Share repurchases can have a significant positive impact on an investor’s portfolio and are a great way to build investor wealth over time.
  2. Investing

    Apple Bought Back $107M of Stock Daily in Past 5 Years

    The company has spent a total of $142 billion on share buybacks since 2012, according to research.
  3. Investing

    Are Share Buybacks Propping Up the Market? (AAPL, MSFT)

    Companies are repurchasing their own shares at a rate not seen in nearly a decade, prompting observers to fret that demand for equities is not as strong as the past six weeks' rally would suggest.
  4. Investing

    Why Buybacks Can Be a Waste of Cash (BX, BAC)

    Learn the motivations behind share repurchase programs, including how they can mask slowing organic growth and why many companies buy their shares high and sell low.
  5. Taxes

    Terms & Conditions - 2018 Grant Agreement

    These are the terms and conditions for's 2018 grant agreement.
  6. Personal Finance

    Marriage, Divorce And The Dotted Line

    Does signing a prenuptial agreement put your marriage on shaky ground, or is it just smart planning?
  7. Investing

    Goldman Predicts Surge in Buybacks (AAPL, MSFT)

    The investment bank foresees stock repurchases to account for the largest share of cash used by S&P 500 companies for the second time in 20 years.
  8. Investing

    Stock Buyback/Repurchase

    A stock buyback, or repurchase, occurs when a company buys its own shares off the market and therefore reduces the amount of stock outstanding.
  9. Personal Finance

    Create A Pain-Free Postnuptial Agreement

    This marital contract can underline your love for each other - not undermine it.
  10. Small Business

    GoDaddy or eNom: Which Domain Reseller Program To Use? (GDDY)

    Here are the pros and cons of the domain name reseller programs offered by GoDaddy and eNom.
  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. Repurchase agreements versus reverse repurchase agreements

    Learn about repurchase agreements and reverse repurchase agreements, their risks and tax implications, and where the Federal ... Read Answer >>
  3. Which terms should be included in a partnership agreement?

    Understand what specific terms should be included in a business partnership agreement and how each affects the partners in ... Read Answer >>
  4. How does it affect a company's credit rating to buy back shares?

    Learn how buying back shares can negatively affect a company's credit rating if the company uses debt to finance a share ... Read Answer >>
Hot Definitions
  1. Standard Deviation

    A measure of the dispersion of a set of data from its mean, calculated as the square root of the variance. The more spread ...
  2. Entrepreneur

    An Entrepreneur is an individual who founds and runs a small business and assumes all the risk and reward of the venture. ...
  3. Money Market

    The money market is a segment of the financial market in which financial instruments with high liquidity and very short maturities ...
  4. Perfect Competition

    Pure or perfect competition is a theoretical market structure in which a number of criteria such as perfect information and ...
  5. Compound Interest

    Compound Interest is interest calculated on the initial principal and also on the accumulated interest of previous periods ...
  6. Income Statement

    A financial statement that measures a company's financial performance over a specific accounting period. Financial performance ...
Trading Center