Endowment accounts no longer count for reserves, interest June 17
The Deutsche Bundesbank announced that balances held on endowment accounts will no longer be counted towards minimum reserve requirements or be eligible for interest on excess reserves. These changes take effect from June 17, 2026.
Overnight balances: A new regime
The Bundesbank has clarified that, effective June 17, 2026, overnight balances on endowment accounts will no longer be considered for minimum reserve requirements.
This also applies to the calculation of any recourse to the marginal lending facility.
Furthermore, these balances will not be eligible for the newly introduced automatic remuneration of excess reserves, which also commences on June 17, 2026.
This decision aligns with the European Central Bank's Decision (EU) 2026/812, published on April 10, 2026, concerning the remuneration of excess reserves.
The Bundesbank reiterates that endowment accounts are not intended for holding overnight balances, and account holders are contractually obliged to transfer any balances to an MCA or RTGS-DCA account by the end of each business day.
This strict adherence to the contractual obligation is now mandatory.
From exception to strict adherence
The clarification follows previous communications, notably Circular No. 39/2020, which informed credit institutions about changes to endowment account services in the context of TARGET2/T2S consolidation.
A key aspect of these changes was the requirement that endowment accounts must not show any balance at the end of the day.
Account holders are thus required to transfer any such balance to an MCA or RTGS-DCA account daily.
While previous guidance (Circular No. 18/2023) allowed for exceptional overnight balances to be counted towards minimum reserves, this practice will be discontinued from June 17, 2026.
The Bundesbank emphasizes that these accounts are not designed as reserve accounts and are explicitly not for holding overnight funds.
Closing an operational loophole
This move by the Bundesbank effectively closes a long-standing operational loophole for credit institutions.
By strictly enforcing the rule against overnight balances on endowment accounts, the central bank ensures greater discipline in liquidity management.
It also aligns national practices with the broader ECB framework for remunerating excess reserves, promoting consistency across the Eurosystem.