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6500  Consumer Protection
Appendix A to Part 230—Annual Percentage Yield Calculation
The annual percentage yield measures the total amount of interest
paid on an account based on the interest rate and the frequency of
compounding.^{1}
The annual percentage yield is expressed as an annualized rate, based
on a 365day year.^{2}
Part I of this appendix discusses the annual percentage yield
calculations for account disclosures and advertisements, while Part II
discusses annual percentage yield earned calculations for periodic
statements.
Part I. Annual Percentage Yield for Account Disclosures and
Advertising Purposes
In general, the annual percentage yield for account disclosures
under §§ 230.4 and 230.5 and for advertising under § 230.8 is an
annualized rate that reflects the relationship between the amount of
interest that would be earned by the consumer for the term of the
account and the amount of principal used to calculate that interest.
Special rules apply to accounts with tiered and stepped interest rates,
and to certain time accounts with a stated maturity greater than one
year.
A. General Rules
Except as provided in Part I.E. of this appendix, the annual
percentage yield shall be calculated by the formula shown below.
Institutions shall calculate the annual percentage yield based on the
actual number of days in the term of the account. For accounts without
a stated maturity date (such as a typical savings or transaction
account), the calculation shall be based on an assumed term of 365
days. In determining the total interest figure to be used in the
formula, institutions shall assume that all principal and interest
remain on deposit for the entire term and that no other transactions
(deposits or withdrawals) occur
during the
term.^{3}
For time accounts that are offered in multiples of months, institutions
may base the number of days on either the actual number of days during
the applicable period, or the number of days that would occur for any
actual sequence of that many calendar months. If institutions choose to
use the latter rule, they must use the same number of days to calculate
the dollar amount of interest earned on the account that is used in the
annual percentage yield formula (where "Interest" is divided by
"Principal").
The annual percentage yield is calculated by use of the following
general formula ("APY" is used for convenience in the formulas):
APY = 100 [(1 + Interest/Principal)^{365/Days in term)
– 1]
} "Principal" is the amount of funds assumed to have
been deposited at the beginning of the account.
"Interest" is the total dollar amount of interest earned on
the Principal for the term of the account.
"Days in term" is the actual number of days in the term
of the account. When the "days in term" is 365 (that is, where
the stated maturity is 365 days or where the account does
not
have a stated
maturity), the annual percentage yield can be calculated by use of the
following simple formula:
APY = 100 (Interest/Principal)
Examples
(1) If an institution pays $61.68 in interest for a 365day year on
$1,000 deposited into a NOW account, using the general formula above,
the annual percentage yield is 6.17%:
APY = 100[(1 + 61.68/1,000)^{(365/365) – 1]
} APY = 6.17%
Or, using the simple formula above (since, as an account without a
stated term, the term is deemed to be 365 days):
APY = 100(61.68/1,000)
H APY = 6.17%
(2) If an institution pays $30.37 in interest on a $1,000 sixmonth
certificate of deposit (where the sixmonth period used by the
institution contains 182 days), using the general formula above, the
annual percentage yield is 6.18%:
APY = 100[(1 + 30.37/1,000)^{(365/182) – 1]
} APY = 6.18%
B. SteppedRate Accounts (Different Rates Apply in Succeeding
Periods)
For accounts with two or more interest rates applied in succeeding
periods (where the rates are known at the time the account is opened),
an institution shall assume each interest rate is in effect for the
length of time provided for in the deposit contract.
Examples
(1) If an institution offers a $1,000 6month certificate of
deposit on which it pays a 5% interest rate, compounded daily, for the
first three months (which contain 91 days), and a 5.5% interest rate,
compounded daily, for the next three months (which contain 92 days),
the total interest for six months is $26.68 and, using the general
formula above, the annual percentage yield is 5.39%:
APY = 100[(1 + 26.68/1,000)^{(365/183) – 1]
} APY = 5.39%
(2) If an institution offers a $1,000 twoyear certificate of
deposit on which it pays a 6% interest rate, compounded daily, for the
first year, and a 6.5% interest rate, compounded daily, for the next
year, the total interest for two years is $133.13, and, using the
general formula above, the annual percentage yield is 6.45%:
APY = 100[(1 + 133.13/1,000)^{(365/730) – 1]
} APY = 6.45%
C. VariableRate Accounts
For variablerate accounts without an introductory premium or
discounted rate, an institution must base the calculation only on the
initial interest rate in effect when the account is opened (or
advertised), and assume that this rate will not change during the year.
Variablerate accounts with an introductory premium (or discount)
rate must be calculated like a steppedrate account. Thus, an
institution shall assume that: (1) The introductory interest rate is in
effect for the length of time provided for in the deposit contract; and
(2) the variable interest rate that would have been in effect when the
account is opened or advertised (but for the introductory rate) is in
effect for the remainder of the year. If the variable rate is tied to
an index, the indexbased rate in effect at the time of disclosure must
be used for the remainder of the year. If the rate is not tied to an
index, the rate in effect for existing consumers holding the same
account (who are not receiving the introductory interest rate) must be
used for the remainder of the year.
For example, if an institution offers an account on which it pays a
7% interest rate, compounded daily, for the first three months (which,
for example, contain 91 days), while the variable interest rate that
would have been in effect when the account was opened was 5%, the
total interest for a 365day year for a $1,000 deposit is $56.52 (based
on 91 days at 7% followed by 274 days at 5%). Using the simple
formula, the annual percentage yield is 5.65%:
APY = 100 (56.52/1,000)
APY = 5.65%
D. TieredRate Accounts (Different Rates Apply to Specified Balance
Levels)
For accounts in which two or more interest rates paid on the account
are applicable to specified balance levels, the institution must
calculate the annual percentage yield in accordance with the method
described below that it uses to calculate interest. In all cases, an
annual percentage yield (or a range of annual percentage yields, if
appropriate) must be disclosed for each balance tier.
For purposes of the examples discussed below, assume the following:
Interest rate (percent)

Deposit balance required to earn rate

5.25

Up to but not exceeding $2,500.

5.50

Above $2,500
but not exceeding $15,000.

5.75

Above $15,000.

Tiering Method A. Under this method, an
institution pays on the full balance in the account the stated interest
rate that corresponds to the applicable deposit tier. For example, if a
consumer deposits $8,000, the institution pays the 5.50% interest rate
on the entire $8,000.
When this method is used to determine interest, only one annual
percentage yield will apply to each tier. Within each tier, the annual
percentage yield will not vary with the amount of principal assumed to
have been deposited.
For the interest rates and deposit balances assumed above, the
institution will state three annual percentage yieldsone
corresponding to each balance tier. Calculation of each annual
percentage yield is similar for this type of account as for accounts
with a single interest rate. Thus, the calculation is based on the
total amount of interest that would be received by the consumer for
each tier of the account for a year and the principal assumed to have
been deposited to earn that amount of interest.
First tier. Assuming daily compounding, the institution
will pay $53.90 in interest on a $1,000 deposit. Using the general
formula, for the first tier, the annual percentage yield is 5.39%:
APY = 100[(1 + 53.90/1,000)^{(365/365) – 1]
} APY = 5.39%
Using the simple formula:
APY = 100 (53.90/1,000)
APY = 5.39%
Second tier. The institution will pay $452.29 in
interest on an $8,000 deposit. Thus, using the simple formula, the
annual percentage yield for the second tier is 5.65%:
APY = 100 (452.29/8,000)
APY = 5.65%
Third tier. The institution will pay $1,183.61 in
interest on a $20,000 deposit. Thus, using the simple formula, the
annual percentage yield for the third tier is 5.92%:
APY = 100 (1,183.61/20,000)
APY = 5.92%
Tiering Method B. Under this method, an institution pays
the stated interest rate only on that portion of the balance within the
specified tier. For example, if a consumer deposits $8,000, the
institution pays 5.25% on $2,500 and 5.50% on $5,500 (the difference
between $8,000 and the first tier cutoff of $2,500).
The institution that computes interest in this manner must provide a
range that shows the lowest and the highest annual percentage yields
for each tier (other than for the first tier, which, like the tiers in
Method A, has the same annual percentage yield throughout). The low
figure for an annual percentage yield range is calculated based on the
total amount of interest earned for a year assuming the minimum
principal required to earn the interest rate for that tier. The high
figure for an annual percentage yield range is based on the amount of
interest the institution would pay on the highest principal that could
be deposited to earn that same interest rate. If the account does not
have a limit on the maximum amount that can be deposited, the
institution may assume any amount.
For the tiering structure assumed above, the institution would state
a total of five annual percentage yieldsone figure for the first tier
and two figures stated as a range for the other two tiers.
First tier. Assuming daily compounding, the institution
would pay $53.90 in interest on a $1,000 deposit. For this first tier,
using the simple formula, the annual percentage yield is 5.39%:
APY = 100 (53.90/1,000)
APY = 5.39%
Second tier. For the second tier, the institution would
pay between $134.75 and $841.45 in interest, based on assumed balances
of $2,500.01 and $15,000, respectively. For $2,500.01, interest would
be figured on $2,500 at 5.25% interest rate plus interest on $.01 at
5.50%. For the low end of the second tier, therefore, the annual
percentage yield is 5.39%, using the simple formula:
APY = 100 (134.75/2,500)
APY = 5.39%
For $15,000, interest is figured on $2,500 at 5.25% interest rate
plus interest on $12,500 at 5.50% interest rate. For the high end of
the second tier, the annual percentage yield, using the simple formula,
is 5.61%:
APY = 100 (841.45/15,000)
APY = 5.61%
Thus, the annual percentage yield range for the second tier is
5.39% to 5.61%.
Third tier. For the third tier, the institution would
pay $841.45 in interest on the low end of the third tier (a balance of
$15,000.01). For $15,000.01, interest would be figured on $2,500 at
5.25% interest rate, plus interest on $12,500 at 5.50% interest rate,
plus interest on $.01 at 5.75% interest rate. For the low end of the
third tier, therefore, the annual percentage yield (using the simple
formula) is 5.61%:
APY = 100 (841.45/15,000)
APY = 5.61%
Since the institution does not limit the account balance, it may
assume any maximum amount for the purposes of computing the annual
percentage yield for the high end of the third tier. For an assumed
maximum balance amount of $100,000, interest would be figured on $2,500
at 5.25% interest rate, plus interest on $12,500 at 5.50% interest
rate, plus interest on $85,000 at 5.75% interest rate. For the high
end of the third tier, therefore, the annual percentage yield, using
the simple formula, is 5.87%.
APY = 100 (5,871.79/100,000)
APY = 5.87%
Thus, the annual percentage yield range that would be stated for the
third tier is 5.61% to 5.87%.
If the assumed maximum balance amount is $1,000,000 instead of
$100,000, the institution would use $985,000 rather than $85,000 in the
last calculation. In that case, for the high end of the third tier the
annual percentage yield, using the simple formula, is 5.91%:
APY = 100 (59134.22/1,000,000)
APY = 5.91%
Thus, the annual percentage yield range that would be stated for
the third tier is 5.61% to 5.91%.
E. Time Accounts with a Stated Maturity Greater than One Year
that Pay Interest At Least Annually
1. For time accounts with a stated maturity greater than one year
that do not compound interest on an annual or more frequent basis, and
that require the consumer to withdraw interest at least annually, the
annual percentage yield may be disclosed as equal to the interest rate.
Example
(1) If an institution offers a $1,000 twoyear certificate of
deposit that does not compound and that pays out interest semiannually
by check or transfer at a 6.00% interest rate, the annual percentage
yield may be disclosed as equal to the interest rate.
Example
(1) If an institution offers a $1,000 threeyear certificate of
deposit that does not compound and that pays out interest annually
solely by check or transfer at a 5.00% interest rate for the first
year, 6.00% interest rate for the second year, and 7.00% interest
rate for the third year, the institution may compute the composite
interest rate and APY as follows:
(a) Multiply each interest rate by the number of days it will be
in effect;
(b) Add these figures together; and
(c) Divide by the total number of days in the term.
(2) Applied to the example, the products of the interest rates
and days the rates are in effect are (5.00% × 365 days) 1825, (6.00%
× 365 days) 2190, and (7.00% × 365 days) 2555, respectively. The sum
of these products, 6570, is divided by 1095, the total number of days
in the term. The composite interest rate and APY are both 6.00%.
Part II. Annual Percentage Yield Earned for Periodic
Statements
The annual percentage yield earned for periodic statements under
§ 230.6(a) is an annualized rate that reflects the relationship
between the amount of interest actually earned on the consumer's
account during the statement period and the average daily balance in
the account for the statement period. Pursuant to § 230.6(b),
however, if an institution uses the average daily balance method and
calculates interest for a period other than the statement period, the
annual percentage yield earned shall reflect the relationship between
the amount of interest earned and the average daily balance in the
account for that other period.
The annual percentage yield earned shall be calculated by using the
following formulas ("APY Earned" is used for convenience in the
formulas):
A. General formula.
APY Earned = 100 [(1 + Interest earned/Balance)^{(365/Days in
period) – 1]
} "Balance" is the average daily balance in the account for the
period.
"Interest earned" is the actual amount of interest earned on
the account for the period.
"Days in period" is the actual number of days for the period.
Examples
(1) Assume an institution calculates interest for the statement
period (and uses either the daily balance or the average daily balance
method), and the account has a balance of $1,500 for 15 days and a
balance of $500 for the remaining 15 days of a 30day statement period.
The average daily balance for the period is $1,000. The interest earned
(under either balance computation method) is $5.25 during the period.
The annual percentage yield earned (using the formula above) is 6.58%:
APY Earned = 100 [(1 + 5.25/1,000)^{(365/30) –
1]
} APY Earned = 6.58%
(2) Assume an institution calculates interest on the average daily
balance for the calendar month and provides periodic statements that
cover the period from the 16th of one month to the 15th of the next
month. The account has a balance of $2,000 September 1 through
September 15 and a balance of $1,000 for the remaining 15 days of
September. The average daily balance for the month of September is
$1,500, which results in $6.50 in interest earned for the month. The
annual percentage yield earned for the month of September would be
shown on the periodic statement covering September 16 through October
15. The annual percentage yield earned (using the formula above) is
5.40%:
APY Earned = 100 [(6.50/1,500)^{(365/30) – 1]
} APY Earned = 5.40%
(3) Assume an institution calculates interest on the average daily
balance for a quarter (for example, the calendar months of September
through November), and provides monthly periodic statements covering
calendar months. The account has a balance of $1,000 throughout the 30
days of September, a balance of $2,000 throughout the 31 days of
October, and a balance of $3,000 throughout the 30 days of November.
The average daily balance for the quarter is $2,000, which results in
$21 in interest earned for the quarter. The annual percentage yield
earned would be shown on the periodic statement for November. The
annual percentage yield earned (using the formula above) is 4.28%:
APY Earned = 100 [(1 + 21/2,000)^{(365/91) – 1]
} APY Earned = 4.28%
B. Special formula for use where periodic statement is sent
more often than the period for which interest is compounded.
Institutions that use the daily balance method to accrue interest
and that issue periodic statements more often than the period for which
interest is compounded shall use the following special formula:
APY Earned =
The following definition applies for use in this formula (all other
terms are defined under Part II):
"Compounding" is the number of days in each compounding period.
Assume an institution calculates interest for the statement period
using the daily balance method, pays a 5.00% interest rate, compounded
annually, and provides periodic statements for each monthly cycle. The
account has a daily balance of $1,000 for a 30day statement period.
The interest earned is $4.11 for the period, and the annual percentage
yield earned (using the special formula above) is
5.00%:
APY Earned=5.00%
[Codified to 12 C.F.R. Part 230, Appendix A]
[Appendix A amended at 57 Fed. Reg. 46480, October 9, 1992,
effective September 21, 1992; 58 Fed. Reg. 15082, March 19, 1993; 60
Fed. Reg. 5130, January 26, 1995, effective January 18, 1995; 63 Fed.
Reg. 40638, July 30, 1998, effective August 28,
1998]
Appendix B to Part 230—Model Clauses and Sample Forms
Table of contents
B1Model Clauses for Account Disclosures (Section 230.4(b))
B2Model Clauses for Change in Terms (Section 230.5(a))
B3Model Clauses for PreMaturity Notices for Time Accounts
(Section 230.5(b)(2) and 230.5(d))
B4Sample Form (Multiple Accounts)
B5Sample Form (Now Account)
B6Sample Form (Tiered Rate Money Market Account)
B7Sample Form (Certificate of Deposit)
B8Sample Form (Certificate of Deposit Advertisement)
B9Sample Form (Money Market Account Advertisement)
B1Model Clauses for Account Disclosures
(a) Rate information
(i) Fixedrate accounts
The interest rate on your account is _______% with an annual
percentage yield of _______%. You will be paid this rate [for
(time period)/ until (date)/ for at least 30 calendar days].
(ii) Variablerate accounts
The interest rate on your account is _______% with an annual
percentage yield of _______%.
Your interest rate and annual percentage yield may change.
Determination of Rate
The interest rate on your account is based on (name of index)
[plus/minus a margin of _______].
or
At our discretion, we may change the interest rate on your account.
Frequency of Rate Changes
We may change the interest rate on your account [every (time
period)/at any time].
Limitations on Rate Changes
The interest rate for your account will never change by more than
_______% each (time period).
The interest rate will never be (less/more) than _______%.
or
The interest rate will never [exceed _______% above/drop more
than _______% below] the interest rate initially disclosed to
you.
(iii) Steppedrate accounts
The initial interest rate for your account is _______%. You
will be paid this rate [for (time period)/until (date)]. After that
time, the interest rate for your account will be _______%, and
you will be paid this rate [for (time period)/until (date)]. The
annual percentage yield for your account is _______%.
(iv) Tieredrate accounts
Tiering Method A
• If your [daily balance/average daily balance] is
$ ____________________________________________ or more, the interest rate paid on the entire balance
in your account will be ____________________________________________ % with an annual percentage
yield of ____________________________________________ %.
• If your [daily balance/average daily balance] is more
than $ ____________________________________________ , but less than $ ____________________________________________ , the
interest rate paid on the entire balance in your account will
be ____________________________________________% % with an annual percentage yield
of ____________________________________________ %.
• If your [daily balance/average daily balance] is
$ ____________________________________________ or less, the interest rate paid on the entire balance
will be ____________________________________________ % with an annual percentage yield
of ____________________________________________ %.
Tiering Method B
• An interest rate of ____________________________________________ % will be paid only for
that portion of your [daily balance/average daily balance] that is
greater than $ ____________________________________________ . The annual percentage yield for this
tier will range from ____________________________________________ % to ____________________________________________ %, depending
on the balance in the account.
• An interest rate of ____________________________________________ % will be paid only for
that portion of your [daily balance/average daily balance] that is
greater than $ ____________________________________________ , but less than $ ____________________________________________ . The
annual percentage yield for this tier will range from ____________________________________________ %
to ____________________________________________ %, depending on the balance in the account.
• If your [daily balance/average daily balance] is
$ ____________________________________________ or less, the interest rate paid on the entire balance
will be ____________________________________________ % with an annual percentage yield
of ____________________________________________ %.
(b) Compounding and crediting
(i) Frequency
Interest will be compounded [on a _______ basis/every (time
period)]. Interest will be credited to your account [on
a _______ basis/every (time period)].
(ii) Effect of closing an account
If you close your account before interest is credited, you will not
receive the accrued interest.
(c) Minimum balance requirements
(i) To open the account
You must deposit $ ____________________________________________ to open this account.
(ii) to avoid imposition of fees
A minimum balance fee of $ ____________________________________________ will be imposed every
(time period) if the balance in the account falls below
$ ____________________________________________ any day of the (time period).
A minimum balance fee of $ ____________________________________________ will be imposed every
(time period) if the average daily balance for the (time period) falls
below $ ____________________________________________ . The average daily balance is calculated by
adding the principal in the account for each day of the period and
dividing that figure by the number of days in the period.
(iii) To obtain the annual percentage yield disclosed
You must maintain a minimum balance of $ ____________________________________________ in the
account each day to obtain the disclosed annual percentage yield.
You must maintain a minimum average daily balance of
$ ____________________________________________ to obtain the disclosed annual percentage yield. The
average daily balance is calculated by adding the principal in the
account for each day of the period and dividing that figure by the
number of days in the period.
(d) Balance computation method
(i) Daily balance method
We use the daily balance method to calculate the interest on your
account. This method applies a daily periodic rate to the principal in
the account each day.
(ii) Average daily balance method
We use the average daily balance method to calculate interest on
your account. This method applies a periodic rate to the average daily
balance in the account for the period.
or
The average daily balance is calculated by adding the principal in
the account for each day of the period and dividing that figure by the
number of days in the period.
(e) Accrual of interest on noncash deposits interest begins to
accrue no later than the business day we receive credit for the deposit
of noncash items (for example, checks).
or
Interest begins to accrue on the business day you deposit noncash
items (for example, checks).
(f) Fees
The following fees may be assessed against your account:
_____________________ $ ____________________________________________
_____________________ $ ____________________________________________
_____________________ $ ____________________________________________
____________________________________________ (conditions for imposing fee) $ ____________________________________________
_______ % of_______ .
(g) Transaction limitations
The minimum amount you may [withdraw/write a check for] is
$ _______ .
You may make _______ [deposits into/withdrawals from] your
account each (time period).
You may not make [deposits into/withdrawals from] your account
until the maturity date.
(h) Disclosures relating to time accounts
(i) Time requirements
Your account will mature on (date).
Your account will mature in (time period).
(ii) Early withdrawal penalties
We [will/may] impose a penalty if you withdraw [any/all] of the
[deposited funds/principal] before the maturity date. The fee imposed
will equal ____________________________________________ days/week[s]/month[s] of interest.
or
We [will/may] impose a penalty of $ ____________________________________________ if you withdraw
[any/all] of the [deposited funds/principal] before the maturity
date.
If you withdraw some of your funds before maturity, the interest
rate for the remaining funds in your account will be ____________________________________________ %
with an annual percentage yield of ____________________________________________ %.
(iii) Withdrawal of interest prior to maturity
The annual percentage yield assumes interest will remain on deposit
until maturity. A withdrawal will reduce earnings.
(iv) Renewal policies
(1) Automatically renewable time accounts
This account will automatically renew at maturity.
You will have [ _______ calendar/business] days after the
maturity date to withdraw funds without penalty.
There is no grace period following the maturity of this account to
withdraw funds without penalty.
(2) Nonautomatically renewable time accounts
This account will not renew automatically at maturity. If you do not
renew the account, your deposit will be placed in [an
interestbearing/a noninterestbearing account].
(v) Required interest distribution.
This account requires the distribution of interest and does not
allow interest to remain in the account.
(i) Bonuses
You will [be paid/receive] [$ ____________________________________________ / (description of
item)] as a bonus [when you open the account/on
(date) ____________________________________________ ].
You must maintain a minimum (daily balance/average daily balance) of
$ ____________________________________________ to obtain the bonus.
To earn the bonus, [$ ____________________________________________ / your entire principal] must
remain on deposit [for (time period)/until
(date) ____________________________________________ ].
B2Model Clauses for Change in Terms
On (date), the cost of (type of fee) will increase to
$ ____________________________________________ .
On (date), the interest rate on your account will decrease
to ____________________________________________ % with an annual percentage yield
of ____________________________________________ %.
On (date), the minimum [daily balance/average daily balance]
required to avoid imposition of a fee will increase to
$ ____________________________________________ .
B3Model Clauses for PreMaturity Notices for Time Accounts
(a) Automatically renewable time accounts with maturities of one
year or less but longer than one month.
Your account will mature on (date).
If the account renews, the new maturity date will be (date).
The interest rate for the renewed account will be ____________________________________________ %
with an annual percentage yield of ____________________________________________ %.
or
The interest rate and annual percentage yield have not yet been
determined. They will be available on (date). Please call (phone
number) to learn the interest rate and annual percentage yield for your
new account.
(b) Nonautomatically renewable time accounts with maturities
longer than one year
Your account will mature on (date).
If you do not renew the account, interest [will/will not] be paid
after maturity.
B4SAMPLE FORM (MULTIPLE ACCOUNTS)
______________ BANK ABC DISCLOSURE OF ACCOUNT TERMS
______________
This disclosure contains information about your:
X
NOW Account
• Your interest rate and annual percentage yield may
change. At our discretion, we may change the interest rate on your
account daily. The interest rate for your account will never be less
than 2.00%.
• Interest begins to accrue on the business day you
deposit noncash items (for example, checks).
• Interest is compounded daily and credited on the last
day of each month. If you close your account before interest is
credited, you will not receive the accrued interest.
• We use daily balance method to calculate the interest on
your account. This method applies a daily periodic rate to the
principal in the account each day.
____________________________________________ Passbook Savings Account
• The interest rate on your account will be paid for at
least 30 days.
• Interest begins to accrue on the business day you
deposit noncash items (for example, checks).
• Interest is compounded daily and credited on the last
day of each month. If you close your account before interest is
credited, you will not receive the accrued interest.
• We use the daily balance method to calculate the
interest on your account. This method applies a daily periodic rate to
the principal in the account each day.
Additional disclosures for your account are included on
the attached sheets.
____________________________________________ Money Market Account
• Your interest rate and annual percentage yield may
change. At our discretion, we may change the interest rate on your
account daily. The interest rate on your account will never be less
than 3.00%.
• You may make six (6) transfers from your account, but
only three (3) may be payments by check to third parties.
• Interest begins to accrue on the business day you
deposit noncash items (for example, checks).
• Interest is compounded daily and credited on the last
day of each month. If you close your account before interest is
credited, you will not receive the accrued interest.
• We use the daily balance method to calculate the
interest on your account. This method applies a daily periodic rate to
the principal in the account each day.
____________________________________________ Certificates of Deposit
• The interest rate for your account will be paid until
the maturity date of your certificate (_______ ).
• Interest is compounded daily and will be credited to
your account monthly.
• Interest begins to accrue on the business day you
deposit noncash items (for example, checks).
• This account will automatically renew at maturity. You
will have ten (10) calendar days from the maturity date to withdraw
your funds without being charged a penalty.
• After the account is opened, you may not make deposits
into or withdrawals from this account until the maturity date.
• We use the daily balance method to calculate the
interest on your account. This method applies a daily periodic rate to
the principal in the account each day.
• If any of the deposit is withdrawn before the maturity
date, a penalty as shown below will be imposed:
Term

Early Withdrawal Penalty

3month CD

30 days interest

6month CD

90 days interest

1year CD

120 days interest

2year CD

180 days interest

Additional disclosures for your account are included on
the attached sheets.
(Fee Schedule Insert)
BANK ABC FEE SCHEDULE
NOW Account
• Monthly minimum balance fee if the daily balance drops
below $500 any day of the month $ 7.50
Passbook Savings Account
• Monthly minimum balance fee if the daily balance drops
below $100 any day of the month $ 6.00
• You may make three (3) withdrawals per quarter Each
subsequent withdrawal $ 2.00
Money Market Account
• Monthly minimum balance fee if the daily balance drops
below $1,000 any day of the month $ 5.00
Other Account Fees
• Deposited checks returned $ 5.00
• Balance inquiries (at a branch or at an ATM) $ 1.00
• Check printing (Fee depends on style of
check ordered)
• Your check returned for insufficient funds (per
check) $16.00
• Stop payment request (per request) $12.50
• Certified check (per check) $10.00
Fee does not apply to Passbook Savings Accounts
or Certificates of Deposit.
Additional disclosures for your account are included on the
attached sheet. .
(Rate Sheet Insert)
BANK ABC RATE SHEET
ACCOUNT TYPE

MINIMUM
DEPOSITTO OPEN
ACCOUNTACCOUNT

MINIMUM BALANCE*TO
OBTAINANNUAL PERCENTAGE
YIELD

INTERESTRATE

ANNUAL
PERCENTAGEYIELD

NOW

$ 500

$ 2,500

4.00%

4.08%

PASSBOOK
SAVINGS

$ 100

$ 500

3.50%

3.56%

MONEY
MARKET

$ 1,000

$ 1,000

4.15%

4.24%

3MONTH
CD

$ 1,000

$ 1,000

4.20%

4.29%

6MONTH
CD

$ 1,000

$ 1,000

4.25%

4.34%

1YEAR
CD

$ 1,000

$ 1,000

5.20%

5.34%

2YEAR
CD

$ 1,000

$ 1,000

5.80%

5.97%

*Daily balance (the amount of principal in the account each
day)
B5SAMPLE FORM (NOW ACCOUNT)
BANK XYZ DISCLOSURE OF INTEREST, FEES AND ACCOUNT TERMS NOW
ACCOUNT
Fee schedule
• Monthly minimum balance fee if the daily balance drops
below $1,000 any day of the month$ 7.00
• Fee to stop payment of a check$ 12.50
• Fee for check returns (insufficient fundsper
check)$ 16.00
• Certified check (per check)$ 10.00
• Fee for initial check printing (per 200)$ 12.00
(Cost for check printing varies depending on the style of checks
ordered.)
Rate information
• The interest rate for your account is 4.00%
with an annual percentage yield of 4.08%. Your interest
rate and annual percentage yield may change. At our discretion, we may
change the interest rate for your account at any time. The interest
rate for your account will never be less than 2% each year.
Minimum balance requirements
• You must deposit $500 to open this account.
• You must maintain a minimum balance of $2,500 in the
account each day to obtain the annual percentage yield listed above.
Balance computation method
• We use the daily balance method to calculate the
interest on your account. This method applies a daily periodic rate to
the principal in the account each day.
Compounding and crediting
• Interest for your account will be compounded daily and
credited to your account on the last day of each month.
Accrual of interest on deposits other than cash
• Interest begins to accrue on the business day you
deposit noncash items (for example, checks).
B6SAMPLE FORM (TIEREDRATE MONEY MARKET ACCOUNT)
BANK ABC DISCLOSURE OF INTEREST, FEES AND ACCOUNT TERMS
MONEY MARKET ACCOUNT
Fee schedule
• Check returned for insufficient funds (per
check) $16.00
• Stop payment request (per request) $12.50
• Certified check (per check) $10.00
• Check printing (Fee depends on style of checks
ordered)
Rate information
• If your daily balance is $15,000 or more, the interest
rate paid on the entire balance in your account will be
5.75% with an annual percentage yield of 5.92%.
• If your daily balance is more than $2,500, but less than
$15,000, the interest rate paid on the entire balance in your account
will be 5.50% with an annual percentage yield of
5.65%.
• If your daily balance is $2,500 or less, the interest
rate paid on the entire balance will be 5.25% with an
annual percentage yield of 5.39%.
• Your interest rate and annual percentage yield may
change. At our discretion, we may change the interest rate for your
account at any time. The interest rate for your account will never be
less than 2.00%.
• Interest begins to accrue on the business day you deposit
noncash items (for example, checks).
• Interest is compounded daily and credited on the last day
of each month.
Minimum balance requirements
• You must deposit $1,000 to open this account.
• A minimum balance fee of $5.00 will be imposed every
month if the balance in your account falls below $1,000 any day of the
month.
Balance computation method
• We use the daily balance method to calculate the interest
on your account. This method applies a daily periodic rate to the
principal in the account each day.
Transaction limitations
• You may make six (6) transfers from your account, but
only three (3) may be payments by check to third parties.
B7SAMPLE FORM (CERTIFICATE OF DEPOSIT)
XYZ SAVINGS BANK 1 YEAR CERTIFICATE OF DEPOSIT
Rate information
The interest rate for your account is 5.20% with an annual
percentage yield of 5.34%. You will be paid this rate until the
maturity date of the certificate. Your certificate will mature on
September 30, 1993. The annual percentage yield assumes interest
remains on deposit until maturity. A withdrawal will reduce earnings.
Interest for your account will be compounded daily and credited to
your account on the last day of each month.
Interest begins to accrue on the business day you deposit any noncash
item (for example, checks).
Minimum balance requirements
You must deposit $1,000 to open this account.
You must maintain a minimum balance of $1,000 in your account every
day to obtain the annual percentage yield listed above.
Balance computation method
We use the daily balance method to calculate the interest on your
account. This method applies a daily periodic rate to the principal in
the account each day.
Transaction limitations
After the account is opened, you may not make deposits into or
withdrawals from the account until the maturity date.
Early withdrawal penalty
If you withdraw any principal before the maturity date, a penalty
equal to three months interest will be charged to your account.
Renewal policy
This account will be automatically renewed at maturity. You have a
grace period of ten (10) calendar days after the maturity date to
withdraw the funds without being charged a penalty.
B8SAMPLE FORM (CERTIFICATE OF DEPOSIT ADVERTISEMENT)
BANK XYZ
ALWAYS OFFERS YOU COMPETITIVE CD RATES!!
CERTIFICATES
OF DEPOSIT

ANNUAL PERCENTAGEYIELD
(APY)

5 YEAR

6.31%

4
YEAR

6.07%

3
YEAR

5.72%

2
YEAR

5.52%

1
YEAR

4.54%

6
MONTH

4.34%

90
DAY

4.21%


APYs are offered on accounts
opened from 5/9/93 through 5/18/93.

The minimum balance to open an account and obtain the
APY is $1,000. A penalty may be imposed for early withdrawal.
For more information call:
2021231234
B9SAMPLE FORM (MONEY MARKET ACCOUNT ADVERTISEMENT)
BANK XYZ ALWAYS OFFERS YOU COMPETITIVE RATES!!
MONEY
MARKET ACCOUNTS

ANNUAL PERCENTAGEYIELD
(APY)

Accounts with abalance of $5,000 or
less

5.07%

Accounts with abalance over
$5,000

5.57%

APYs are accurateas of
April 30, 1993

*The rates may change after theaccount
is opened.

Fees could reduce the earnings on the account.
For more information call:
2021231234
B–10 Aggregate Overdraft and Returned Item Fees Sample
Form

Total Forthis period

TotalYeartoDate

Total
Overdraft Fees

$60.00

$150.00

Total Returned Item
Fees

$ 0.00

$ 30.00

[Codified to 12 C.F.R. Part 230, Appendix B]
[Appendix B amended at 60 Fed. Reg. 5131, January 26,
1995, effective January 18, 1995; amended at 74 Fed. Reg. 5593, January
29, 2009, effective January 1, 2010; 74 Fed. Reg. 17769, April 17,
2009, effective January 1, 2010]
Appendix C to Part 230—Effect on State Laws
(a) Inconsistent Requirements
State law requirements that are inconsistent with the requirements
of the act and this part are preempted to the extent of the
inconsistency. A state law is inconsistent if it requires a depository
institution to make disclosures or take actions that contradict the
requirements of the federal law. A state law is also contradictory if
it requires the use of the same term to represent a different amount or
a different meaning than the federal law, requires the use of a term
different from that required in the federal law to describe the same
item, or permits a method of calculating interest on an account
different from that required in the federal law.
(b) Preemption Determinations
A depository institution, state, or other interested party may
request the Board to determine whether a state law requirement is
inconsistent with the federal requirements. A request for a
determination shall be in writing and addressed to the Secretary, Board
of Governors of the Federal Reserve System, Washington, DC 20551.
Notice that the Board intends to make a determination (either on
request or on its own motion) will be published in the Federal
Register, with an opportunity for public comment unless the Board finds
that notice and opportunity for comment would be impracticable,
unnecessary, or contrary to the public interest and publishes its
reasons for such decision. Notice of a final determination will be
published in the Federal Register and furnished to the party who made
the request and to the appropriate state official.
(c) Effect of Preemption Determinations
After the Board determines that a state law is inconsistent, a
depository institution may not make disclosures using the inconsistent
term or take actions relying on the inconsistent law.
(d) Reversal of Determination
The Board reserves the right to reverse a determination for any
reason bearing on the coverage or effect of state or federal law.
Notice of reversal of a determination will be published in the Federal
Register and a copy furnished to the appropriate state official.
[Codified to 12 C.F.R. Part 230, Appendix
C]
Appendix D to Part 230—Issuance of Staff Interpretations
Officials in the Board's Division of Consumer and Community Affairs
are authorized to issue official staff interpretations of this part.
These interpretations provide the protections afforded under
section 271(f) of the act.
Except in unusual circumstances, interpretations will not be issued
separately but will be incorporated in an official commentary to this
part, which will be amended periodically. No staff interpretations will
be issued approving depository institutions' forms, statements, or
calculation tools or methods.
[Codified to 12 C.F.R. Part 230, Appendix D]
^{1}The annual percentage yield reflects only interest and does
not include the value of any bonus (or other consideration worth $10 or
less) that may be provided to the consumer to open, maintain, increase
or renew an account. Interest or other earnings are not to be included
in the annual percentage yield if such amounts are determined by
circumstances that may or may not occur in the future. Go back to Text ^{2}Institutions may calculate the annual percentage yield based
on a 365day or a 366day year in a leap year. Go back to Text ^{3}This assumption shall not be used if an institution requires,
as a condition of the account, that consumers withdraw interest during
the term. In such a case, the interest (and annual percentage yield
calculation) shall reflect that requirement. Go back to Text
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