Our TISA disclosure on our CDs discloses an "Early Withdrawal Penalty" that states the calculation of how the penalty is derived. There is also a disclosure for "Withdrawal limitations." This states that you may not make withdrawals of principal or interest before maturity.
Don't these statements contradict each other? In a quick Google search it seems that many banks also have both disclosures.The way I read Reg. DD is that you only disclose the withdrawal of interest prior to maturity if it is allowed (and it's compounded during the term)?
Withdrawal of interest prior to maturity.
Withdrawal of interest prior to maturity. If compounding occurs during the term and interest may be withdrawn prior to maturity, a statement that the annual percentage yield assumes interest remains on deposit until maturity and that a withdrawal will reduce earnings.
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