What is a Fed master account?
The account that lets an institution settle directly with the Federal Reserve, and why a charter does not guarantee one.
The short version.
A master account is an account at a Federal Reserve Bank. It gives an institution direct access to Fed payment services (Fedwire, FedACH and FedNow) and lets it hold reserves at the central bank.
What it unlocks.
Who can get one.
Eligibility is limited to depository institutions defined in the Federal Reserve Act, and even then the Fed has discretion. Since 2022 it has reviewed requests in three tiers: federally insured institutions get the lightest review; uninsured institutions under federal supervision get more; institutions with neither get the closest scrutiny.
Why it matters for fintechs.
Many new trust banks and uninsured charters fall into the higher-scrutiny tiers. A charter approval does not mean a master account follows. Until one does, you still settle through a partner bank, so plan and budget for that relationship. See our trust bank vs. national bank note for how charter choice affects this.