The deposit rate is the remuneration available to eligible banks when they leave excess cash with the central bank rather than lending or investing it elsewhere. In the euro area, this rate is set within the Eurosystem and helps establish the lower boundary for short-term market rates while influencing banks’ liquidity-management decisions and overall financing conditions.
Source: European Central Bank (ECB) (source). This glossary entry is an independently worded adaptation of the cited information.