A club account can be a time deposit or a savings account, depending on (1) whether it has a defined maturity date, and (2) whether you impose an early withdrawal penalty. I think the comment is there in Reg. DD to alert the reader to the fact that disclosure requirements (and ad requirements, if anyone ever uses a trigger term in a club deposit ad) will vary depending on whether the club account qualifies as a time deposit or savings account.
Back when there was a reserve requirement advantage to having an account classed as a time deposit, banks tried to make their club accounts qualify by imposing the penalty and fixing the maturity date. Today it doesn't matter, so I think more banks structure them as savings accounts.
Frankly, I'm amazed that they survive as a salable product.
Last edited by John Burnett; 07/12/07 03:29 PM.
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John S. Burnett
BankersOnline.com
Fighting for Compliance since 1976
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