An initial account disclosure is given to a member at the time a new term share (certificate) account is opened. If a member or potential member is not present at the account opening, the credit union will mail or deliver the disclosure the earlier of 20 calendar days after the account is opened or a related service is provided, whichever comes first. The disclosure must be in writing in a form that the member or potential member can keep. It is to contain the following information:
1. Rate
Disclose the dividend rate and the APY and that they (1) are based on the assumption that dividends will be added to the principal, or (2) will be paid to the regular share account (number), or (3) will be mailed to the owner(s) of the account.
2. Compounding and crediting.
Disclose that dividends are compounded monthly and credited monthly
3. Minimum balance requirements.
Disclose the fact that the minimum balance required to open the account is $1,000.00.
4. Balance computation method.
Disclose that dividends are calculated using the daily balance method, which applies a daily periodic rate to the principal in the account each day.
5. Accrual of dividends.
Disclose that dividends begin to accrue on the business day the member deposits cash and noncash items (e.g., checks) to the account.
6. Transaction limitations.
Disclose that after the account is opened the member can make no additional deposits until the maturity date stated on the certificate.
7. Maturity date.
Disclose the maturity date of the certificate.
8. Early withdrawal penalties.
State that the credit union will impose a penalty if the member withdraws any of the funds before the maturity date and that the penalty will equal three months’ dividends on a six months deposit or six months’ dividends on a one year or longer deposit.
9. Exceptions to Early Withdrawal Penalties.
At our option, we may pay the account before maturity without imposing an early withdrawal penalty if an account owner dies or is determined legally incompetent by a court or other body of competent jurisdiction.
10. Renewal policies.
Disclose that the certificate account will not automatically renew at maturity. If the member has not notified us by or before the maturity date, we will redeem the certificate and put the money in regular shares.
11. Dividend period.
Disclose that on this type of account, the dividend period of Southern Middlesex County Teachers FCU is monthly, beginning on the date the account is opened and ending on the stated maturity date, unless renewed.
12. National Credit Union Share Insurance Fund.
Disclose that member accounts in this credit union are federally insured by the National Credit Union Share Insurance Fund.
