New to banking, For customers that have CDs that want to do a partial W/D.

Example:

Balance of CD before W/D = 1000.00
W/D amount = 300.00
Penalty is 1.20

Do banks allow for the customer to receive the full amount requested (300.00) and subtract the penalty amount from the CD or does the penalty need to be subtracted from the net proceeds? I realize there would need to be enough money in the CD when taking the penalty from the CD.

Really up to you and your depositor's contract as to how the interest penalty is assessed.