We have a 12 month CD that auto renews. We would now like to offer two 12mth CDs - one for $100,000 at one rate and one for $100,000 and over at a higher rate. Shoudl we separte these into 2 different products or if we can tier the rates, do we need to disclose on our maturity notice that based on balnce they will renew into one fo the rate tiers? In either case would we need to provide the customer a new Certificate of Deposit (or new full Disclosure)

How can you have a tiered rate on a CD? It represents a stagnant amount. How you set the two products up on your system is unrelated to disclosures. You will send them a pre-maturity notice that says call for the rate at maturity. You just give the rate that applies to their specific account when they call.

True they would callfor a rate but our Maturity Notice does say basically that the account will renew in the same way it was opened but this is not actually true; we will have to identfy those accoutn of $100,000 adn renew them in a manner that allows the higher balance account to earn at a higher rate and the lower balnce accounts will earn at a lower rate. I'm just thinking that the customer should know that there are now two options. What if they have $95,000 in their CD and if they knew there was a higher rate if they put $5,000 more in during the grace period they would do so.BUT when they opened their accoount this option was not available? WE have an exam in a couple of months, don't want to get into trouble. I appreciate your responding and your thoughts.

If you want to advertise your new features, there is nothing wrong with that. All your renewal disclosures probably initially indicated was that the account would renew at then current rate for that product. The fact that you have added balance requirements really is not a factor on renewal of an existing CD. If they want to add or subtract from the CD at renewal, it results in a new CD from a disclosure standpoint, regardless how you handle it on your processing system.

Reviving this old thread about CD maturity notices. For fixed rate CDs, we clearly state in the initial disclosure that a notice will be sent that will outline the terms of the new certificate, if they choose to renew. However, we do not include the current rates with the maturity notice, but tell them to call our 1-800# for more information. Is that acceptable? Can we direct them to our website?

1030.5(b)(1) Maturities of longer than one year. If the maturity is longer than one year, the institution shall provide account disclosures set forth in Sec. 1030.4(b) of this part for the new account, along with the date the existing account matures. If the interest rate and annual percentage yield that will be paid for the new account are unknown when disclosures are provided, the institution shall state that those rates have not yet been determined, the date when they will be determined, and a telephone number consumers may call to obtain the interest rate and the annual percentage yield that will be paid for the new account.

Thanks rlcarey!

Follow up question....we are changing the tiers on our fixed rate CD product, combining 5 tiers into 3. Since we are telling the account holder to call for current rates/APY at maturity, do we need to disclose this tier adjustment prior to implementation? We will be changing the website and rate sheet in January 2020.

No - if they want the rate on their CD they can call. What you pay on other CD's for other amounts is not relevant.

You are the best - Thanks!