CD Redemption Fees

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Question:

We recently had a CD held by a Revocable Trust where the Grantor/Co-Trustee died. The other trustee came in and asked to redeem the CD early due to death. We waived the early redemption penalty due to death, but asked ourselves, is this a regulatory requirement or a courtesy, particularly in this case because a Trust doesn't "die".

Answer:

The bank waiver would have been a courtesy, not a requirement, even if the owners were the grantors and not the trust, unless the CD terms and conditions required a waiver in such cases.