What is the deposit facility rate?

10 March 2016 (updated on 13 September 2024)

The deposit facility rate is the interest rate banks receive when they deposit money with the central bank overnight. 

It is one of the three interest rates the ECB sets every six weeks as part of its monetary policy decisions. This is the rate through which the Governing Council steers its monetary policy stance. Money market rates are expected to evolve in the vicinity of the deposit facility rate with tolerance for some volatility as long as it does not blur the signal about the intended monetary policy stance. 

There are two other key interest rates: the rate for our main refinancing operations and the rate on the marginal lending facility. The main refinancing operations rate defines the cost at which banks can borrow from the central bank for a period of one week. If banks need money overnight, they can borrow from the marginal lending facility at a higher rate.