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CD Penalty Vs CD Forfeiture

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Question: 
What is the difference between a CD penalty and a CD forfeiture, if any?
Answer: 

In essence, time deposits must provide for an early withdrawal penalty. Regulation D spells out what a minimum penalty must be. The term "CD forfeiture" has no particularized definition, but that language might be used when the amount of the early withdrawal penalty exceeds the amount of earned or accrued interest and takes a bite out of the amount deposited.

First published on BankersOnline.com 8/31/09

First published on 08/31/2009

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