What is the discount rate?
The discount rate is the interest rate that an eligible
depository institution is charged by its Federal Reserve
Bank to borrow funds, typically for a short period. There
are three primary discount rates: the primary credit rate,
the secondary credit rate, and the seasonal credit rate.
By law, the Board of Directors of each Reserve Bank
establishes the discount rate independently every fourteen
days subject to review and determination by the Board of
Originally, each Reserve Bank set its discount rate to
reflect the banking and credit conditions in its own
District. Over the years, the transition from regional
credit markets to a national credit market has gradually
produced a national discount rate. As a result, the
Federal Reserve maintains a uniform structure of discount
rates across all Reserve Banks.
Further information on the discount window, including
information on current and historical discount rates, is
available on the Federal Reserve Discount Window Web site.
Where can I find out what the current federal funds rate is?
The Federal Open Market Committee's target level for the
federal funds rate is announced in FOMC Statements issued
after each meeting. Current and past FOMC statements are
available on the Federal Open Market Committee section
of the Board's
The current effective federal funds rate is
available in the Board's H.15 Statistical Release, "Selected Interest Rates,"
on the Board's Web site.
Where can I find the latest interest rates?
Current and historical data
on most interest rates
are available in the Board's H.15 Statistical
Release, "Selected Interest Rates," on the Board's Web
Where can I find historical mortgage interest rates to check on my adjustable-rate mortgage?
Lenders use different bases, and sometimes more than one
base, to determine the rate for adjustable-rate mortgages.
Check your mortgage documentation to find out which base
your lender uses to calculate the rate on your adjustable-
rate mortgage, then search for that base on the internet.
What is the prime rate, and does the Federal Reserve set the prime rate?
The prime rate is an interest rate determined by
individual banks. It is often used as a reference rate
(also called the base rate) for many types of loans,
including loans to small businesses and credit card loans.
On its H.15 statistical release, "Selected Interest Rates,"
the Board reports the
prime rate posted by the majority of the largest twenty-
five banks. Although the Federal Reserve has no direct
role in setting the prime rate, many banks choose to set
their prime rates based partly on the target level of the
federal funds rate--the rate that banks charge each other
for short-term loans--established by the Federal Open