Remuneration of minimum reserves

Minimum reserve holdings up to the level of the minimum reserve requirement are remunerated at the average interest rate of the Eurosystem’s main refinancing operations over the maintenance period (weighted according to the number of calendar days). Excess reserves, i.e. holdings exceeding the minimum reserve requirement, are remunerated at 0% or the deposit facility rate, whichever is the lower rate. The ECB cut its deposit rate below 0% with effect from June 11, 2014. Since October 30, 2019, a part of excess liquidity holdings has been exempt from the negative deposit facility rate. For further details, see the section “Two-tier system for remunerating excess reserve holdings.”

Reserve maintenance and remuneration in Austria over time

Two-tier system for remunerating excess reserve holdings

In its meeting of September 12, 2019, the Governing Council of the ECB decided to introduce a two-tier system for remunerating excess reserve holdings. The volume of excess reserves exempt from the deposit facility rate – the exempt tier – is determined as a multiple of a bank’s minimum reserve requirements and is remunerated at a rate determined by the ECB. The first maintenance period for which this system was applied started on October 30, 2019. The multiplier applicable was set at 6, and the interest rate applicable to the exempt tier was set at 0.00%. This means that since October 30, 2019, excess reserves below a bank’s minimum reserve requirement multiplied by 6 have been remunerated at 0.00% p.a.

For more information on the two-tier system, see the ECB's website:
Two-tier system for remunerating excess reserve holdings
Q&A related to the two-tier system for remunerating excess reserve holdings