Federal Reserve Discount Rate


The rate at which member banks may borrow short term funds directly from a Federal Reserve Bank. The discount rate is one of the two interest rates set by the Fed, the other being the Federal funds rate. The Fed actually controls this rate directly, but this fact does not really help in policy implementation, since banks can also find such funds elsewhere. also called discount rate.

Use this term in a sentence

The bank was able to use the federal reserve discount rate in order to borrow short term funds in order to make a new investment.

​ Was this Helpful? YES  NO 6 people found this helpful.

The Federal Reserve Discount Rate was generous at the time, so we took full advantage and managed to increase our leverage more than we originally expected.

​ Was this Helpful? YES  NO 2 people found this helpful.

Since they would need funds to cover expansion and additional lending, they would need to borrow extra funds and would be borrowing at the federal reserve discount rate.

​ Was this Helpful? YES  NO 6 people found this helpful.

Show more usage examples...

Related Terms

Browse Definitions by Letter: # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
Federal Reserve credit Federal funds rate