12 CFR 217.101 - Premiums on deposits.

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§ 217.101 Premiums on deposits.
(a) Section 19(i) of the Federal Reserve Act and § 217.3 of Regulation Q prohibits a member bank from paying interest on a demand deposit. Premiums, whether in the form of merchandise, credit, or cash, given by a member bank to a depositor will be regarded as an advertising or promotional expense rather than a payment of interest if:
(1) The premium is given to a depositor only at the time of the opening of a new account or an addition to an existing account;
(2) No more than two premiums per account are given within a 12-month period; and
(3) The value of the premium or, in the case, of articles of merchandise, the total cost (including taxes, shipping, warehousing, packaging, and handling costs) does not exceed $10 for deposits of less than $5,000 or $20 for deposits of $5,000 or more.
The costs of premiums may not be averaged. The member bank should retain sufficient supporting documentation showing that the total cost of a premium, including shipping, warehousing, packaging, and handling costs, does not exceed the applicable $10/$20 limitations and that no portion of the total cost of any premium has been attributed to development, advertising, promotional, or other expenses. A member bank is not permitted directly or indirectly to solicit or promote deposits from customers on the basis that the funds will be divided into more than one account by the institution for the purpose of providing more than two premiums per deposit within a 12-month period.
(b) Notwithstanding paragraph (a) of this section, any premium that is not, directly or indirectly, related to or dependent on the balance in a demand deposit account and the duration of the account balance shall not be considered the payment of interest on a demand deposit account and shall not be subject to the limitations in paragraph (a) of this section.
[52 FR 47698, Dec. 16, 1987. Redesignated at 57 FR 43336, Sept. 21, 1992; 62 FR 26737, May 15, 1997]

Title 12 published on 2014-01-01

The following are only the Rules published in the Federal Register after the published date of Title 12.

For a complete list of all Rules, Proposed Rules, and Notices view the Rulemaking tab.

  • 2014-07-30; vol. 79 # 146 - Wednesday, July 30, 2014
    1. 79 FR 44120 - Regulatory Capital Rules: Advanced Approaches Risk-Based Capital Rule, Revisions to the Definition of Eligible Guarantee
      GPO FDSys XML | Text
      FEDERAL RESERVE SYSTEM, FEDERAL DEPOSIT INSURANCE CORPORATION, DEPARTMENT OF TREASURY, Office of the Comptroller of the Currency
      Final rule.
      This rule is effective on October 1, 2014. Any company subject to the rule may elect to adopt it before this date.
      12 CFR Part 3

Title 12 published on 2014-01-01

The following are ALL rules, proposed rules, and notices (chronologically) published in the Federal Register relating to 12 CFR 217 after this date.

  • 2014-07-30; vol. 79 # 146 - Wednesday, July 30, 2014
    1. 79 FR 44120 - Regulatory Capital Rules: Advanced Approaches Risk-Based Capital Rule, Revisions to the Definition of Eligible Guarantee
      GPO FDSys XML | Text
      FEDERAL RESERVE SYSTEM, FEDERAL DEPOSIT INSURANCE CORPORATION, DEPARTMENT OF TREASURY, Office of the Comptroller of the Currency
      Final rule.
      This rule is effective on October 1, 2014. Any company subject to the rule may elect to adopt it before this date.
      12 CFR Part 3