Overview of Discount Window

Federal Reserve Discount Window Lending Program

The Federal Reserve continues to offer Seasonal Credit, largely to small banks. Seasonal credit is extended to institutions that can demonstrate a clear pattern of recurring intra-yearly swings in their funding needs. Eligible institutions usually are located in agricultural or tourist areas.

Discount Window Lending Programs Image Effective January 9, 2003, the Federal Reserve introduced two new Discount Window programs:

The Primary Credit program is now the principal safety valve for ensuring adequate liquidity in the banking system; it is a backup source of short-term funds for sound depository institutions.

Secondary Credit is available to depository institutions that do not qualify for primary credit.

Adjustment and extended credit are no longer offered. The seasonal credit program continues as before.

Primary Credit

Secondary Credit

Priced at a rate above the FOMC’s target for the federal funds rate, primary credit is available to depository institutions in sound overall condition to meet short-term, backup funding needs. Normally, primary credit will be granted on a “no-questions-asked,” minimally administered basis. There are no restrictions on borrowers’ use of primary credit.

Priced slightly higher, secondary credit is available to depository institutions not eligible for primary credit. Secondary credit entails a higher level of administration.

		Contact your local FRB district or visit the Federal Reserve's Discount Window Site