Discount Window

Business, Legal & Accounting Glossary

Definition: Discount Window




Full Definition of Discount Window


The discount window is not actually a place but is where banks go to borrow money from the Federal Reserve.

Through the discount window, the regional branches of the Federal Reserve Bank lend money to banks that need funds to retain liquidity. Discount window loans are fully secured and are meant to be short-term.

The discount rate is the interest rate charged to the borrowing banks, and there are three levels to the rate depending on how credit-worthy the institution is judged: primary credit, secondary credit, and seasonal credit.

Banks have to qualify to be eligible to borrow via the discount window and must provide collateral for the loans they take.


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Definition Sources


Definitions for Discount Window are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 5th August, 2021 | 0 Views.