Waiving a CD Penalty upon Death of a Depositor

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Question:

Is there a regulation regarding waiving a CD penalty upon the death of an owner, or is this just a bank policy matter?

Answer:

Federal Reserve Board Regulation D allows a bank to waive the required minimum early withdrawal penalty under a number of circumstances. One of those circumstances is the death of an owner of the account. The regulation makes a waiver in such cases a matter of bank policy.