Hi All,

Would a certificate of deposit (CD) be considered a fixed rate or variable rate if the CD matures and rolls over to the new market rate? Example: customer has a 1 year CD at .25% it matures and the CD rolls over to .10%. Everything else in the CD stays the same (Same CD Number, Term, etc...)

We are trying to determine if on bank advertisements for CDs if we are required to have the statement "The interest rate and annual percentage yield may change after the account is opened".

I have read the definitions for both fixed and variable rate accounts in regulation DD and it appears that the CD fits more into the variable rate account definition. As the interest rate may change after the account is opened. I also reviewed the TISA disclosure and did not see anywhere where the institution contracts to give at least 30 calendar days advance written notice of rate decreases.

Any thoughts?

Fixed rate. The rate doesn't change during the term of the deposit, and you assign a new rate at each rollover. Check out Sample Disclosure B-7 in Appendix B to Regulation DD. It's for an auto-renewable CD, and there is no mention of the rate being variable.