Sorry I wasn't clear..
Disclosing the compounding frequency is where I am confused.
We do require accrued interest to be withdrawn at least annually, either transferred or paid to CD-at maturity only-by customer choice.
Frequency of crediting of accrued interest is customer choice.
Either by transfer to deposit account or check monthly, quarterly, semi annually or annually. If they don't choose to transfer accrued interest it will be paid to the balance of the CD at maturity or at least annually.
Disregarding the customer's choices....I want to think that the bank's compounding frequency is at maturity for CDs less than a year; for CDs of one year it would be 'none' and for those over one year, 'annually'. Am I close?
Thanks again.
I'm making some assumptions based on my interpretation of what you've stated above, but I believe the compounding frequency should be "at maturity" for CDs of 12 months or less and "annually" for CDs that are > 12 months (you can't compound less frequently than annually).
It sounds to me like you have other crediting frequencies based on the term of the CD when it comes to "how" the interest will be "paid" to the customer. It is most common at our bank to credit the interest back to the CD, as that allows the customer to earn a higher APY.
Occasionally, we have customers who want the interest credited/paid to them, either by credit to an account or by check. They can do this as frequently as monthly, depending on the term and dollar amount of the CD.
The CD's TISA disclosure would read:
Interest will be compounded: At maturity (or annually if > 12 mos)
Interest will be credited: (whatever frequency they chose or at maturity/annually)
Hope that helps.