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A fourth facility, the Term Deposit Facility, was introduced December 9, 2009, and permitted April 30, 2010, with an effective date of June four, 2010. 119 The Time period Deposit Facility permits Reserve Banks to offer time period deposits to establishments that are eligible to obtain earnings on their balances at Reserve Banks. Term deposits are intended to facilitate the implementation of financial policy by providing a tool by which the Federal Reserve can manage the aggregate quantity of reserve balances held by depository establishments. Funds positioned in term deposits are removed from the accounts of participating establishments for the lifetime of the time period deposit and thus drain reserve balances from the banking system.
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