Effective March 26, 2020, the Federal Reserve Board (“Board”) reduced the reserve requirement ratios to zero percent. The Board reduced the ratio in an effort to free up liquidity to allow financial institutions to lend money to consumers and businesses. Also, the Board indicated there are not changes to the six convenient transfer limit on savings deposits with the elimination of the reserve requirements. However, the distinction between savings deposits and transaction accounts is no longer significant due to this reserve requirement change because neither type of account is now subject to reserve requirements. The Board did note that the six transfer limit still applies to any account classified as a savings deposit for FR 2900 deposit reports (Report of Transaction Accounts, Other Deposits, and Vault Cash).
