Fed funds

US banking.

Fed funds ("Federal funds") are funds deposited by commercial banks at Federal Reserve Banks, including funds in excess of bank reserve requirements.

Banks may lend federal funds to each other on an overnight basis to help the borrowing bank satisfy its reserve requirements or liquidity needs.

This lending will be at the lender's "federal funds rate".

The Federal Reserve calculates and publishes the "effective federal funds rate" (EFFR) as a weighted average of the reported transaction rates for each business day.

See also

• Board of Governors of the Federal Reserve System
• Federal funds futures (FFF)
• Federal Funds Rate
• Federal Reserve Bank
• Federal Reserve System
• OBFR
• PCE inflation
• Policy interest rate
• Quantitative easing
• Weighted average