Discount Rate Interest | Definition | What is a Discount Rate?

Discount Rate Interest

Discount Rate Interest Glossary Definition

The interest rate that the Federal Reserve charges a bank to borrow funds, when a bank is temporarily short of funds. Collateral is necessary to borrow, and such borrowing is quite limited because the Fed views it as a privilege to be used to meet short-term liquidity needs, and not a device to increase earnings.

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