The discount window offers lending with the discount rate courtesy of the federal government for unexpected liquidity concerns. Eligible banks and institutions borrow funds from the Federal Reserve for a short term, generally overnight but up to 90 days. Utilized only as a last chance for companies, most shy away from this type of lending because of the negative vibes that such an efforts send to its stockholders, investors and customers.

Banks or other financial institutions acquire money at a discount rate via a "discount window" which is a federal reserve bank branch in the area of the company. Historically, each federal reserve bank offered interest rates based on regional need, however, with a global economy, the discount rate is now consistent throughout the country. Economists state drawbacks of the quick infusion of funds into the economy include inflation.

Get more information about the discount rate including the following:

1. See past, present and future discount rate data.

2. Find out how the discount rate affects businesses.

3. Compare the discount rate with other financial indicators.

Action Steps
The best contacts and resources to help you get it done

Get help with discount rate professionals

Get discount rate training including getting the historical, current and future discount rates. This information clearly shows where the federal reserve stepped in to offer lower interest rates and expanded programs to offer support to the struggling financial industry. Financial experts weigh, showing where they believe the discount rate will go.

I recommend: Get the current discount rate information directly from the Federal Reserve Bank. See where the experts believe the federal discount rate will go in the months ahead at The Financial Forecast Center. In addition, get historical data on the interest rates.

See the discount rate in action

Get discount rate information and see this portion of the economy in action. Early in 2008, the federal reserve opened up the discount window to financial institutions. The hope that the fed could instill confidence to businesses including Freddie Mac and Fannie Mae drove that decision.

I recommend: Get discount rate advice from the Bloomburg Report video, discussing the discount rate and window expansion to assist financial companies with liquidity. See what a discount rate consultant for CNBC says about businesses using the discount window.

See the correlation between the discount rate, the federal funds rate, the prime rate and COFI

Federal funds offered to banks are then offered to the public at a higher rate. The prime rate results when the banks are polled and the results are compiled. The discount rate is derived when a .25 point is added to the federal funds rate.

I recommend: See Bankrate.com for comparisons between the prime rate, COFI, Federal Funds Rate and Federal Discount Rate. Get information on each rate and how they are figured. The Privateer compares rates between the federal funds rate and the discount rate from 1990 to current day.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  AIG utilized the discount window, requesting $28 billion and revealing that company's financial vulnerability. The federal government allowed this type of lending with the discount rate but put tight stipulations on the struggling financial giant.