Answer:
Answer by Randy Carey: That would be up to the bank, but they are making a premature withdrawal and you could assess both the early withdrawal penalties and change the rates if you wish.
Answer:
Answer by Ken Golliher: In all likelihood, your time deposit says "Non-negotiable" or "Non transferable" across the top. Regardless, you cannot change a joint account into a trust account via file maintenance. It's a lousy banking practice and leaves a loophole for someone to say your customer did not effectively transfer the funds to the trust. Close account A, open account B.
As Randy notes, how you handle penalties & interest rates is based on bank policy. My suggested approach is that you look at all of the instruments being cashed in and say "Let's make a deal; we will not charge an early withdrawal penalty and will give you a "blended" interest rate and maturity if you agree to consolidate these into a lesser number of instruments."(Redoing 14 time deposits is a ridiculous waste of time.) Deposit insurance will not be affected by the consolidation as all of the instruments are held in the name of the trust.
First published on BankersOnline.com 1/30/12
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