When the Fed pays interest on reserves held at Fed banks,the interest rate used is the discount rate.

Name: When the Fed pays interest on reserves held at Fed banks,the interest rate used is the discount rate.
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The Fed pays interest on reserves through the Interest on Excess Reserves (IOER) program, not through the discount rate. The discount rate is the interest rate at which banks can borrow from the Fed in case of emergency.

When the Fed Pays Interest on Reserves Held at Fed