We want to offer a "no penalty" CD. From what I can tell, the main restriction is that the money must be on deposit for at least 6 dsys. If it is not they we must access a penalty of at least 7 days. Other than that I do not see any other restrictions. Am I missing something? What disclosures would be required if advertising this type of CD on our website?

The 7 day penalty is the only restriction from a regulatory perspective.

However, advertising a "no penalty" CD and then footnoting the 7 day penalty might be considered unfair and deceptive.

There may be an issue from a liquidity (ALCO) standpoint.

If the customers can close out the CD at any point, and your rates go up, they close out and re-open at the higher rate, and you will be paying more interest.

In the same manner - your competitor offers a higher rate and your deposits disappear. No penalty.

I'm with Randy that to advertise "no penalty" would be deceptive because you have no choice during the initial period.

And while this sounds good from a marketing perspective, why attract money simply on the basis of not charging a penalty for early withdrawal? Doesn't seem like it would be a stable base. This is only advantageous if you're paying lower rates to compensate.