During a review of our current TISD for an IRA CD product it was discovered in the Early Withdrawal Penalty section that it is checked that a 'Penalty may be imposed for withdrawals before maturity. The penalty will be an amount equal to: Seven days' interest on the amount withdrawn if the withdrawal is made within the first six days after the deposit.'

However, when reading through Reg D, 204.2(c)(1)(i) footnote 1(a) it states: IRA rules, written by the IRS, allow depositors to have a rescission period during the first week after establishing an IRA. Reg D must parallel the IRA rules, so an exception to Reg D's definition of time deposit waives the penalty for an IRA closed within the first seven days. If an IRA customer closes their new IRA on day seven or before, their total principal is returned. However, all interest earned must be forfeited.

We're understanding we'd need to uncheck that box on our current TISD since we cannot charge a penalty fee on IRA CD's for early withdrawal. Please advise if we should remove the Early Withdrawal Penalty from all of our IRA CD Truth In Savings Disclosures.

Thanks!

It depends on when the IRA is set up - that is the account and not the individual CD held in the account. I might have one IRA account at the bank and then have a dozen CD's tied to it. You take it as you go - if you have to waive it - you waive it. I would not be altering my CD TISA disclosure.

Thank you. After additional research we determined the statement on our CD TISA was only in regard to the interest being forfeited and that is allowed so we will not alter.