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Contemporaneous Reserves

Categories: Banking, Investing

If you were traveling through the territories in, say, the late 1850s, and ran across an old, crusty prospector, with a scraggly beard and wide-brimmed hat, there's about a 0.00000000001% chance that that person would be named Contemporaneous Reserve. That chance might seem low, but it's a lot higher than meeting someone with that name today. (We imagine him as part of the wider Reserve clan, with cousins States Rights Reserve and Beauregard Reserve.)

Contemporaneous reserves refer to a kind of bank reserve. They represent the accounting for money the institution has set aside to cover weekly deposits. The rules for contemporaneous reserves are set out by the Federal Reserve.

If you busted into a bank vault and stole the money there, you'd be dipping into the contemporaneous reserves. Not that we're recommending you do that.

Find other enlightening terms in Shmoop Finance Genius Bar(f)