Fed Quietly Drops Reserve Interest Rate to 3.90 Percent Amid Routine Updates
Published Date: 11/14/2025
Rule
Summary
Starting November 14, 2025, banks and similar institutions will earn 3.90% interest on their money held at Federal Reserve Banks, down 0.25% from before. This change helps keep short-term interest rates steady and affects how banks manage their cash reserves. The new rate actually kicked in on October 30, 2025, so banks should already be seeing the difference in their earnings.
Analyzed Economic Effects
1 provisions identified: 0 benefits, 1 costs, 0 mixed.
Banks' Reserve Interest Rate Cut
Beginning October 30, 2025 (applicable) and effective in the rule on November 14, 2025, depository institutions and other eligible institutions will earn 3.90% interest on balances held at Federal Reserve Banks. This is a 0.25 percentage point decrease from the prior IORB level of 4.15%, which reduces the interest those institutions receive on their reserve balances.
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Key Dates
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