What is the importance of getting an original certificate of deposit back and signed by the customer when it is closed? We have proof of who received the funds, when and how...
CDs are non-negotiable, so they can't be presented by anyone other than the customer.

What is the worst that could happen?

Depends on who you ask in this forum. At a prior bank I worked for, the executor of the decedent's estate presented the CD and we had to pay up. We know it was closed based on an affidavit of lost instrument, but we couldn't find it to prove it had been paid. Since they had the instrument and we had no proof, we had to pay the CD face + interest for about 25 years. Nice sum.

"Since they had the instrument and we had no proof, we had to pay the CD face + interest for about 25 years. Nice sum."

This was a court ordered payment? If so, can you provide the case citation as I have never seen one of these claims be successfully prosecuted against a bank.

We asked the same question. Our CD's also say non negotiable so we had almost decided not to require the original until... we read the back of the card. It clearly says the original must be presented for withdrawal. It also says much to our surprise that only the persons who sign the certificate can withdrawal. For years we have only been requiring one signature on joint CD's.

depending on and/or account....

We retain original CD and mark as canceled. File/scan/destroy according to time frames.

Lost affidavits are good for us but we sure as sunshine hold on to copies of those bad boys.

We require the original on our paper CD's. Since we went paperless, I guess that's not an issue anymore.

We had access to counsel by someone that also served as a judge (obviously, couldn't have been the judge on that particular case if it had gone to court because it would have been a conflict of interest). Based on his advice and that of other attorneys, it was strongly suggested that we pay. So we did.

RR Joker, can you explain your paperless process?

cccgirl - I'm not RRJ, but I can tell you how we converted to paperless. We created a CD form that looked very similar to what we had been using and added verbiage indicating it was a receipt for a time deposit. Wolters Kluwers has these type of forms also.

We modified our agreement to identify the document as a receipt (and we incorporated the TISA disclosure as well) and we acknowledged that it did not have to be surrendered at the time of renewal or encashment.

We modified our CD withdrawal ticket to add a signature line to accommodate partial withdrawals by clients and create a good audit trail.

We utilized a flag on our system (JHA Silverlake) to flag them as Paperless = Y.

Worked great. I can't imagine using "real" CDs in today's financial environment. Paperless is the way to go IMHO.

I think "paperless" is the wrong term, as we still print out the receipts.

All the FIs I've worked at had a similar process. A physical certificate was never required, as the little "certificate" aka worthless piece of paper, was simply a receipt of opening the CD and making the deposit. The withdrawal slips had signature lines and we also had a separate slip for closing a CD.