- federal funds
- Member bank deposits at the Federal Reserve; these funds are loaned by member banks to other member banks. Chicago Board of Trade glossary————Short-term investments/borrowings between banks, usually called fed funds.The investing/lending bank refers to the transaction as fed funds sold while the borrowing bank refers to the transaction as fed funds purchased. Despite its name, these transactions are not loans to or from the federal government. Nor do they include any guarantee or backing from the federal government. They are only called federal funds because the parties exchange the funds by transferring balances from the lender's account with its Federal Reserve District Bank to the borrower's account with its Federal Reserve District Bank. Fed funds investments are usually overnight loans.See term fed funds. American Banker Glossary————Noninterest-bearing deposits held in reserve for depository institutions at their district Federal Reserve Bank. Also, excess reserves lent by banks to each other. Bloomberg Financial Dictionary
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federal funds UK US noun [plural] (also fed funds) GOVERNMENT, FINANCE► money that the US government makes available for each state to pay for projects or research: »Local taxes fund $4.7 billion of spending on schools, with state and federal funds providing the rest.
»Many of the housing projects in the area were built with federal funds and tax credits.
$70,000/$2 million/5.5 billion, etc. in federal funds »The national laboratory is spending $60 million this year in federal funds on advanced biodetection systems.
use/receive/lose federal funds »The proposal would offer states flexibility in using federal funds to expand health insurance coverage.
► in the US, money that banks give to federal reserve banks to lend to other banks who need it: federal funds (interest) rate »The Fed has taken the decision to cut both the discount rate and the federal funds rate a quarter point.
Financial and business terms. 2012.
