Enter the total amount in reserves ($) and the total deposits (or other reservable liabilities) ($) into the Calculator. The calculator will evaluate the Reserve Percentage. 

Reserve Percentage Calculator

Enter any 2 values to calculate the missing variable

Related Calculators

Reserve Percentage Formula

RSR = TR / TD * 100

Variables:

  • RSR is the Reserve Percentage (%)
  • TR is the total amount in reserves ($)
  • TD is the total deposits (or other reservable liabilities) ($)

To calculate the Reserve Percentage, divide the total amount in reserves by total deposits (or other reservable liabilities), then multiply by 100.

How to Calculate Reserve Percentage?

The following steps outline how to calculate the Reserve Percentage.

  1. First, determine the total amount in reserves ($). 
  2. Next, determine the total deposits (or other reservable liabilities) ($). 
  3. Next, gather the formula from above = RSR = TR / TD * 100.
  4. Finally, calculate the Reserve Percentage.
  5. After inserting the variables and calculating the result, check your answer with the calculator above.

Example Problem : 

Use the following variables as an example problem to test your knowledge.

total amount in reserves ($) = 500000

total deposits (or other reservable liabilities) ($) = 10000000

Reserve Percentage (%) = (500000 / 10000000) × 100 = 5%

FAQs

What is the significance of calculating the Reserve Percentage for a bank?

The Reserve Percentage indicates the portion of a bank’s deposits (or other reservable liabilities) held as reserves (such as vault cash and balances at a central bank). This can help assess liquidity for withdrawals and payment/settlement needs and, where applicable, compliance with reserve requirements.

How does the Reserve Percentage affect a bank’s ability to lend?

All else equal, a lower Reserve Percentage means a smaller share of deposits is held as reserves, leaving more funds available to invest in loans or other assets. Conversely, a higher Reserve Percentage can reduce the amount available for lending.

Can the Reserve Percentage change over time?

Yes, the Reserve Percentage can change due to changes in policy requirements (where applicable), the bank’s liquidity needs, or changes in the total amount of reserves or deposits. Banks may adjust their balance sheets and reserve holdings accordingly.

Why might a bank aim for a Reserve Percentage higher than the minimum required?

Banks might maintain a higher Reserve Percentage to ensure extra liquidity for unexpected withdrawal demands, to strengthen financial stability, or in response to uncertain economic conditions. This conservative approach can help protect the bank during financial downturns.