We are considering going from issuing actual paper certificate of deposits to book entry only. We have changed up the wording in the CD receipt, but I am not sure how we would go about converting all of our current CD customers from actual paper to book entry. Would sending a letter to these customers letting them know we have converted their paper CD into a book entry along with a receipt showing the conversion suffice? Has anyone else gone through such a conversion?

Unless you are issuing negotiable CDs, then your CDs are already book entry. The piece of paper means absolutely nothing. It is just a piece of paper regardless of what it says on it. Official bank records will always prevail.

Randy, if they were issuing negotiable CD's what would be the process? I know most banks don't have those but I am aware on one bank that does and they are looking at changing to book entry.

The negotiable CD is a contract, and a unilateral change may constitute breach of contract. Do not proceed without getting the advice of legal counsel.

About the only thing they can do is stop issuing them. There is nothing they can do with the ones that are circulating (as Richard said) and they would just have to be redeemed when they mature.

Thanks Randy and Richard

Thank you so very much! Thankfully, our CDs are not negotiable. I appreciate the information.