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#2194485 - 10/02/18 06:57 PM CD-Interest earned during grace period
Likes to Comply Offline
Diamond Poster
Joined: Nov 2008
Posts: 1,060
In the mountains
Our CDs have ten day grace period and are all set to auto renew. We pay interest if the account is closed before interest is credited.

So if a CD is redeemed during the grace period, lets say on the 9th day, should we be paying 9 days of interest that is earning on the new term? Or is this not required because the CD was redeemed and never really went into the new term?
Always learning something new...

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Operations Compliance
#2194487 - 10/02/18 07:15 PM Re: CD-Interest earned during grace period Likes to Comply
David Dickinson Offline
10K Club
David Dickinson
Joined: Nov 2000
Posts: 18,762
Central City, NE
It's not a regulatory issue, but rather your policy. Does your CD contract address this. Legally, you don't owe them anything after the maturity date. The contract expired and your obligation to pay them ended on the maturity date.
David Dickinson

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#2194545 - 10/03/18 02:25 PM Re: CD-Interest earned during grace period Likes to Comply
burkemi Offline
Platinum Poster
Joined: Nov 2013
Posts: 522
If you're wanting to compare banks (we are $4.5B), we pay the interest IF it is automatically renewable. CD expires on 10/3/18, customer has until 10/13/18 to close, but the auto renew CD has already begun with a 10/3 date. The only thing our grace period does is allow the customer to close the CD without penalty.
I reject your reality and replace it with my own.

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