Deposit Reclassification


A unique opportunity for your institution to recover your reserve balance, which represents a 10% withholding of your lowest cost of funds - transaction deposits.

Deposit Reclassification, also known as a retail sweep program, is a Federal Reserve Board acknowledged practice that reduces your reserve requirement through classifying your institution’s checking accounts as savings, which are not subject to reserve requirements. Currently, your reserve requirement is met with your institution’s non-earning vault cash and reserve balance at your local Federal Reserve Bank (FRB) or at a “pass through” account with another financial institution.

Federal Reserve Balances behave as an illiquid asset, earning minimal interest (Fed Funds). Your institution can convert these assets with Deposit Reclassification into earning assets with a much better rate of return – perhaps with commercial, mortgage, and consumer loans, or higher yielding securities in your investment portfolio.

Download Brochure about Deposit Reclassification →


Deposit Reclassification will:

  • Permanently recover your Federal Reserve Bank Balance
  • Increase income on your earning assets
  • Requires only 60 days to implement
  • Immediately impacts your bottom line
  • Compliant with Regulation D and Federal Reserve Board Requirements
  • Invisible to your customer and has no adverse affect on the account holder


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The Deposit Reclassification conversion process can be completed within 45 days and requires very little time from your personnel.  Deposit Reclassification is completely under your control since it uses your existing personal computer (PC) software.  Most importantly, the Deposit Reclassification project is approved by your local Federal Reserve Bank, in advance, in order to comply with FRB Regulation D.

Pioneering Deposit Reclassification

"Deposit Reclassification is a solution that allows a bank or a credit union to reduce the amount of money that they're carrying in their reserve requirement at the Federal Reserve Bank. In such a way, that they can free that money up to come back to their bank or credit union, for them to deploy out into their community." - Douglas Ceto

Deposit Reclassification and C3 Financial Go Hand in Hand.


Deposit Reclassification transforms excess reserves balances at the FRB into new funding sources for loans and investments. As a result of lowering your reserve requirement, you have the opportunity to unlock additional earning assets through the reduction of vault cash.

Think Inside the Vault:  Put Non-Performing Assets to Work for You!

The “cost” of cash is increasing and bankers are recognizing a loss in an interest-earning opportunity when keeping excess vault cash.  By instituting better vault cash management practices, banks and credit unions can immediately improve earnings. 

Learn More About c3 Financial →

Before and After Graph - Deposit Reclassification and C3 Financial

Curious to know how much your institution is holding with the Fed?

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