0% Interest?

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Question:

Is a financial institution required to pay interest on certificates of deposit or can they pay and disclose 0%?

Answer:

Short answer is "No". I am unable to locate any regulation that requires the payment of interest on a time deposit, that is, if that account is not held either as an IOLTA or one held as required by OFAC. The disclosure of payment or nonpayment of interest for personal accounts is covered by Reg. DD. dditionally, if interest is paid, withdrawals are covered by Reg. D.

First published on BankersOnline.com 10/12/09