Answer:
An "on demand" certificate of deposit won't qualify as a time deposit, but it is a demand deposit under section 204.2(b)(1): "Demand deposit means a deposit that is payable on demand, or a deposit issued with an original maturity or required notice period of less than seven days, or a deposit representing funds for which the depository institution does not reserve the right to require at least seven days' written notice of an intended withdrawal." This type of certificate of deposit cannot earn interest.
First published on BankersOnline.com 8/24/09
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