Hello -

I am looking for clarification on Reg. D and assessing CD early withdrawal penalties during the first 6 days after the date of deposit.

At our bank, when a CD matures, the CD owner can add funds during the pending/grace period and then let the CD rollover with the new amount and keep the same CD account.

Because new funds were added during the renewal period, does the 6-day rule apply? Meaning must we charge an early withdrawal penalty if the client wants a partial withdrawal from the CD up to 6 days after the renewal?

Or does the 6-day rule only apply to the original deposit amount and renewals (with funds added) are not considered in the reg?

Thank you!

A time deposit, or a portion thereof, may be paid during the period when an early withdrawal penalty would otherwise be required under this part without imposing an early withdrawal penalty specified by this part:

(f) Where a time deposit is withdrawn within ten days after a specified maturity date even though the deposit contract provided for automatic renewal at the maturity date.

Thank you!

Note that there is no REQUIREMENT that the bank waive the early withdrawal fee. It is permissive, not prescriptive.