The federal funds rate is the interest rate offered by the same industry (short-term financing between commercial banks and other financial institutions makes up for the short-term liquidity problem, and the time is very short, generally calculated in days, and the longer one is only about 3 months). The discount rate is the interest rate that the holder needs to pay when transferring his creditor's rights to other financial institutions, and its cost is equal to the remaining maturity days and the discount rate.

Excess deposit reserve is the remaining currency after financial institutions meet the requirements of the central bank. Financial institutions can freely control this part of the funds. In some countries, the central bank pays interest on the quasi-principal of excess deposits. When these funds are not used, besides the interest paid by the central bank (very low or no), it is better to use these funds. However, considering its buffering effect on deposit reserve, its application scope is very short. Usually it is likely to be interbank lending, which can not only gain short-term income, but also play the role of liquidity and make up for the shortage of deposit reserve. We can take a good look at the concept of opportunity cost, which means giving up the maximum benefit in comparison.