Government Services

The Federal Reserve System, through the Reserve Banks, performs various services for the U.S. Treasury and other government, quasi­government, and international agencies. Each year, billions of dollars are deposited to and withdrawn by various government agencies from operating_accounts in the U.S. Treasury held by the Federal Reserve Banks.

The Federal Reserve Banks hold, in their vaults, collateral for gov­ernment agencies to secure public funds that are on deposit with pri­vate depository institutions. In addition, Reserve Banks receive for deposit to the Treasury’s accounts such items as federal unemploy­ment taxes, individual income taxes withheld by payroll deduction, corporate income taxes, and certain federal excise taxes.

The Federal Reserve Banks also issue and redeem instruments of the public_debt, such as savings bonds and Treasury securities. They have certain responsibilities for allotment and delivery of government securities and for wire transfer of securities. In addition, the Reserve Banks make periodic payments of interest on outstanding obligations of the U.S Treasury, federal agencies,» and government-sponsored corporations.