Fed Proposes No Interest on New Special-Purpose Payment Accounts

The Federal Reserve is proposing to create a new category of 'Payment Accounts'—special-purpose master accounts distinct from standard Fed accounts—and would explicitly exclude balances in these accounts from earning interest. This is directly relevant to fintechs, payment companies, and potentially crypto firms seeking Fed master account access, as it defines materially less favorable economic terms for this new account type. Compliance and treasury teams at institutions pursuing Fed account access should factor this into their business models.