We have just had a company come in and address the bank’s efficiencies. One item they brought up was the way we handle our CDs. We treat them as a negotiable instrument. They are generated out of the FIS system and clearly state that they are ‘nontransferable and nonnegotiable’. If the original is not returned to the bank we produce an indemnity bond. They are suggesting that we discontinue this practice. The withdraw slip and check would be used for the redemption signature. Does anyone have any experiences or thoughts on this they would like to share?

If they are non-transferable and non-negotiable, what are they indemnifying?? That they lost a worthless slip of paper?? All you are really handing them is a receipt, regardless of what you may be calling it. The piece of paper is worthless. Listen to your consultants.

It really is a "worthless slip of paper."

"Efficiency consultants" oftentimes sell checklist advice; there is no great insight involved in suggesting that banks rid themselves of certificates of deposit and related indemnification processes.

Except that the bank didn't think of it themselves and would have continued on their merry way issuing certificates and obtaining indemnifications!

My point is that these folks usually sell the same advice to everyone; if the bank had just gotten a copy of the checklist they used at different bank last week they would have gotten the same advice.

thanks to everyone for their responses

We just went through a similar situation with our certificates. Ours also say non-negotiable and non-transferable. We were on the verge of discontinuing the requirement to produce the original for redemption when we decided to review the disclosures on the back of the certificate. Surprise! It states the original certificate must be produced for withdrawal. Since this is a Wolters-Kluwer standard form, we are unable to change the verbiage. We are now considering doing away with it and using our standard account agreement with a CD receipt.

Banks (aided and abetted by vendors) over the years confused these savings certificates with jumbo negotiable certificates of deposit that can change hands. They are rarely seen in community banks, but the actually certificate (unless it is an electronic paperless document) must be produced.

As I recall, they have a time deposit receipt form.