Is participation in an excess balance account required by the Federal Reserve?
No. Participation in an excess balance account is strictly voluntary. However, beginning on July 2, 2009, Federal Home Loan Banks will no longer be paid interest on excess balances held in their master accounts at Federal Reserve Banks. Any depository institution that uses a Federal Home Loan Bank as a pass-through correspondent will no longer earn interest on its excess balances, unless the excess balances are held in an excess balance account.
