By Michael R. Crittenden

Of Dow Jones NEWSWIRES

WASHINGTON -(Dow Jones)- The Federal Reserve on Monday will offer $3 billion in 28-day term deposits, effectively a test of an exit program the central bank could one day use on a larger scale to drain money from the financial system.

The central bank said in a release that the loans are being made through a program intended to help banks familiarize themselves with the Fed's term deposit options. The program, called the Term Deposit Facility, is one of many options the Fed has to help manage the reserves held by banks. A rise in term deposits can help reduce the size of reserve balances from the financial system.

The Fed said the $3 billion offering will open Monday, May 14, with a minimum bid of $10,000. The auction will settle May 17, with a maturity date of June 14.

-By Michael R. Crittenden, of Dow Jones Newswires; michael.crittenden@dowjones.com; 202-862-9273