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ment relating to such deposits. No such person or organization shall advertise a percentage yield on any deposit it solicits for a bank which is not authorized to be paid and advertised by such bank.

(h) Withdrawal penalties. Any advertisement relating to the interest paid on any deposit regarding which the bank imposes a penalty for withdrawal prior to the deposit's maturity shall include a clear and conspicuous statement that in the event the depositor is allowed to withdraw all or part of his deposit before maturity, a "substantial penalty" will be imposed.

ased § 329.101 Transfers not included within the six transfers allowed for nondemand deposits pursuant to

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§ 329.1(b)(3).

This interpretive rule describes certain transfers that are not included as any of the six transfers allowed pursuant to § 329.1(b)(3).

(a) Transfers from a deposit dedicati scribed in § 329.1(b)(3) that are made

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to the bank are not deemed to be included within the six transfers permitted for a nondemand deposit by that paragraph (3) when the transfers are made for the purpose of repaying loans and associated expenses at the bank (as originator or servicer). This exemption does not apply to transfers to the bank that are made for the purpose of repaying loans that are made by the bank to the depositor's demand account for the purpose of covering overdrafts.

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(b) Transfers from a deposit described in § 329.1(b)(3) that are made to another account of the same depositor at the bank are not deemed to be included within the six transfers permitted for a nondemand deposit by that paragraph (3) when the transfers are made by mail, messenger, automated teller machine or in person.

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(c) Withdrawals from a deposit described in § 329.1(b)(3) are not deemed to be included within the six transfers permitted for a nondemand deposit by that paragraph (3) when the withsits fodrawals are made by mail, messenger, ion telephone (via check mailed to the deank positor), automated teller machine, or ained in person.

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This interpretive rule explains the second proviso of § 329.1(b)(3).

(a) No deposit described in § 329.1(b)(3) that is held by an organization that is not organized for profit and that is described in paragraphs 501(c) (3) through (13) and (19) and section 528 of the Internal Revenue Code of 1954 (26 U.S.C. 501(c) (3)–(13) & (19), & 528) is deemed to be a demand deposit. Actual Internal Revenue Service documentation of the organization's tax-exempt status is not required; it is merely an aid in making the determination.

(b) Νο deposit described in § 329.1(b)(3) that is held by a depositor identified in section 2(a)(2) of Pub. L. 93-100 (12 U.S.C. 1832(a)(2))— whether the deposit is used for business purposes or otherwise-is deemed to be a demand deposit.

(c) No deposit described in § 329.1(b)(3) that represents funds held in a fiduciary capacity (whether the fiduciary is a natural person or otherwise) is deemed to be a demand deposit if all the beneficiaries of the account are natural persons.

This interpretive rule describes certain payments that are not deemed to be "interest" as defined in § 329.1(c).

(a) Premiums, whether in the form of merchandise, credit, or cash, given by a bank to the holder of a deposit will not be regarded as "interest" as defined in § 329.1(c) if:

(1) The premium is given to the depositor only at the time of the opening of a new account or an addition to, or renewal of, an existing account;

(2) No more than two premiums per deposit are given in any twelve-month interval; and (3) the value of the premium (in the case of merchandise, the total cost to the bank, including shipping, warehousing, packaging, and handling costs) does not exceed $10 for a deposit of less than $5,000 or $20 for a deposit of $5,000 or more.

(b) The costs of premiums may not be averaged.

(c) A bank may not solicit funds for deposit on the basis that the bank will

divide the funds into several accounts for the purpose of enabling the bank to pay the depositor more than two premiums within a twelve-month interval on the solicited funds.

(d) The bank must retain sufficient information for examiners to determine that the requirements of this section have been satisfied.

§ 329.104 Ten-day grace period.

This interpretive rule provides for 10-day grace periods during which interest may be paid o, a deposit without violating § 329.2.

(a) During the ten calendar days following the maturity of a time deposit, the bank may continue to pay interest on the matured deposit at the contract rate of the deposit, or at any lesser rate, if the deposit contract provides for such post-maturity interest. The payment of such post-maturity interest will not be regarded as the payment of interest on a demand deposit.

(b) If a time deposit is renewed within ten calendar days after maturity, the renewed deposit may be dated back to the maturity date of the matured deposit and may draw interest from that date. The payment of such additional interest will not be regarded as the payment of interest on a demand deposit.

(c) If a time or savings deposit is renewed within ten days after expiration of the period of notice given with respect to its repayment, the renewed deposit may draw interest from the date such notice period expired. The payment of such additional interest will not be regarded as the payment of interest on a demand deposit.

§ 330.1 General principles applicable in determining insurance of deposit ac counts.

(a) General. This Part 330 provides for determination by the Corporation of the insured depositors of an insured bank and the amount of their insured deposit accounts. The rules for determining the insurance coverage of de posit accounts maintained by deposi tors in the same or different rights and capacities in the same insured bank are set forth in the following provisions of this part. Insofar as rules of local law enter into such determinations, the law of the jurisdiction in which the insured bank's principal office is located shall govern, except where the insured bank is an insured branch of a foreign bank, in which case the law of the jurisdiction where the insured branch is located shall govern.

(b) Records. (1) The deposit account records of the insured bank shall be conclusive as to the existence of any relationship pursuant to which the funds in the account are deposited and

on which a claim for insurance coverge is founded. Examples would be rustee, agent, custodian or executor. To claim for insurance based on such relationship will be recognized in the bsence of such disclosure.

(2) If the deposit account records of n insured bank disclose the existence f a relationship which may provide a asis for additional insurance, the deails of the relationship and the intersts of other parties in the account must be ascertainable either from the ecords of the bank or the records of he depositor maintained in good faith nd in the regular course of business. (3) [Reserved]

(4) The interests of the co-owners of joint deposit account shall be eemed equal, unless otherwise stated n the insured bank's records in the ase of a tenancy in common.

(c) Valuation of trust interests. (1) 'rust interests in the same trust deosited in the same account will be eparately insured if the value of the rust interest is capable of determinaion, without evaluation of contingenies, except for those covered by the >resent worth tables and rules of calulation for their use set forth in 20.2031-7 of the Federal Estate Tax Regulations (26 CFR 20.2031-7). Notwithstanding the foregoing, in connecion with pension and other trusteed mployee benefit funds (including hose qualifing under section 401(d) or ection 408(a) of the Internal Revenue Code of 1954), the trust interest of ach participant shall be evaluated for nsurance purposes as if the interest of uch participant had fully vested as of he date the insured bank was closed on account of inability to meet the denands of its depositors.

(2) In connection with any trust in which certain trust interests are not capable of evaluation in accordance with the foregoing rule, payment by the Corporation to the trustee with respect to all such trust interests shall not exceed the basic insured amount of $100,000.

(3) Each trust interest in any trust established by two or more settlors shall be deemed to be derived from each settlor pro rata to his contribution to the trust.

(4) The term "trust interest" means the interest of a beneficiary in an irrevocable express trust, whether created by trust instrument or statute, but does not include any interest retained by the settlor. Notwithstanding the foregoing, any allocable interest created pursuant to an employee benefit plan, including a plan qualified under section 401(d) or section 408(a) of the Internal Revenue Code of 1954, as amended, shall be deemed to be a trust interest.

(5) With respect to trust funds held by an insured bank in a fiduciary capacity pursuant to section 7(i) of the Act, the term "trust interest" shall mean the same as the term "trust funds" as used in section 3(p) of the Act.

(d) Insured branches of foreign banks. (1) Except as provided in paragraph (d)(3) of this section deposits in an insured branch of a foreign bank which are payable in the United States shall be insured in accordance with the rules of this part.

(2) Deposits held by an insured depositor in any insured branch or insured branches of the same foreign bank shall be added together for deposit insurance purposes.

(3) Deposits to the credit of the foreign bank or any office, branch or agency of and wholly owned (except for a nominal number of directors' shares) subsidiary of the foreign bank shall not be insured.

[32 FR 10408, July 14, 1967, as amended at 43 FR 10683, Mar. 15, 1978; 43 FR 58081, Dec. 12, 1978; 44 FR 40059, July 9, 1979; 45 FR 23645, Apr. 8, 1980; 51 FR 21138, June 11, 1986]

§ 330.2 Single ownership accounts.

Funds owned by an individual and deposited in the manner set forth below shall be added together and insured up to $100,000 in the aggregate.

(a) Individual accounts. Funds owned by an individual (or by the community between husband and wife of which the individual is a member) and deposited in one or more deposit accounts in his own name shall be insured up to $100,000 in the aggregate.

(b) Accounts held by agents or nominees. Funds owned by a principal and

deposited in one or more deposit accounts in the name or names of agents or nominees shall be added to any individual deposit accounts of the principal and insured up to $100,000 in the aggregate.

(c) Accounts held by guardians, custodians, or conservators. Funds held by a guardian, custodian, or conservator for the benefit of his ward or for the benefit of a minor under a Uniform Gifts to Minors Act and deposited in one or more deposit accounts in the name of the guardian, custodian, or conservator shall be added to any individual deposit accounts of the ward or minor and insured up to $100,000 in the aggregate.

[32 FR 10408, July 14, 1967, as amended at 45 FR 23645, Apr. 8, 1980]

§ 330.3 Testamentary accounts.

(a) Funds owned by an individual and deposited in a revocable trust account, tentative or "Totten" trust account, "payable-on-death" account or similar account evidencing an intention that on his death the funds shall belong to his spouse, child or grandchild shall be insured up to $100,000 in the aggregate as to each such named beneficiary, separately from any other accounts of the owner.

(b) If the named beneficiary of such an account is other than the owner's spouse, child or grandchild, the funds in such account shall be added to any individual accounts of such owner and insured up to $100,000 in the aggregate.

[32 FR 10408, July 14, 1967, as amended at 45 FR 23646, Apr. 8, 1980]

§ 330.4 Accounts held by executors or administrators.

Funds of a decedent held in the name of the decedent or in the name of the executor or administrator of his estate and deposited in one or more deposit accounts shall be insured up to $100,000 in the aggregate, separately from the individual deposit accounts of the beneficiaries of the estate or of the executor or administrator.

[32 FR 10408, July 14, 1967, as amended at 45 FR 23646, Apr. 8, 1980]

§ 330.5 Accounts held by a corporation or partnership.

(a) Deposit accounts of a corporation or partnership engaged in any independent activity shall be insured up to $100,000 in the aggregate. A deposit account of a corporation or partnership not engaged in an independent activity shall be deemed to be owned by the person or persons owning such corporation or comprising such partnership and, for deposit insurance purposes, the interest of each person in such a deposit account shall be added to any other deposit accounts individually owned by such person and insured up to $100,000 in the aggregate.

(b) Notwithstanding any other provision of this Part 330, any trust or other business arrangement which has filed or is required to file a registration statement with the Securities and Exchange Commission pursuant to section 8 of the Investment Company Act of 1940 shall be deemed to be a corporation for purposes of determining deposit insurance coverage.

[32 FR 10408, July 14, 1967, as amended at 42 FR 10312, Feb. 22, 1977; 45 FR 23646, Apr. 8, 1980]

§ 330.6 Accounts held by an unincorporated association.

Deposit accounts of an unincorporated association engaged in any independent activity shall be insured up to $100,000 in the aggregate. A deposit account of an unincorporated association not engaged in an independent activity shall be deemed to be owned by the persons comprising such association and for deposit insurance purposes, the interest of each owner in such a deposit account shall be added to any other deposit accounts individually owned by such person and insured up to $100,000 in the aggregate. [32 FR 10408, July 14, 1967, as amended at 45 FR 23646, Apr. 8, 1980]

§ 330.7 Independent activity.

The term "independent activity" means any activity other than one directed solely at increasing insurance coverage.

30.8

Public unit accounts.

a) (1) Each official custodian of nds of the United States depositing e same in time or savings deposits in insured bank shall be separately ined up to $100,000 as to such deposEach such official custodian deposng such funds in a demand deposit all be separately insured up to 00,000.

2) Each official custodian of funds any State of the United States or y county, municipality, or political division thereof depositing the

ne in time or savings deposits in an ured bank in the same State shall separately insured up to $100,000. 3) Each official custodian of funds the District of Columbia lawfully positing the same in time or savings posits in an insured bank in the Disct of Columbia shall be separately ured up to $100,000.

4) Each official custodian of funds the Commonwealth of Puerto Rico, e Virgin Islands, American Samoa, Guam, or of any county, municipal, or political subdivision thereof wfully depositing the same in time savings deposits in an insured bank Puerto Rico, the Virgin Islands, erican Samoa, or Guam, respectiveshall be separately insured up to )0,000.

5) Each official custodian referred in paragraphs (a) (2), (3), and (4) of s section lawfully depositing such ids in demand deposits in an ined bank within the same State, Dist of Columbia, Commonwealth, session or territory comprising the lic unit or wherein the public unit ocated, or in any form of deposit, ether time, savings or demand, in insured bank outside such jurisdic1, shall be separately insured up to 0,000.

) For purposes of this paragraph if the same person is an official todian of more than one public , he shall be separately insured 1 respect to the public funds held him for each such unit, but shall be separately insured by virtue of ling different offices in such unit except as provided in paragraph (b) his section, holding such funds for erent purposes.

(b) Public bond issues. Where an officer, agent or employee of a public unit has custody of certain funds which by law or under the bond indenture are required to be paid to the holders of bonds issued by the public unit, any deposit of such funds in an insured bank shall be deemed to be a deposit by a trustee of trust funds of which the bondholders are pro rata beneficiaries, and each such beneficial interest shall be separately insured up to $100,000.

(c) Political subdivision. The term "political subdivision" includes any subdivision of a public unit, as defined in section 3(m) of the Federal Deposit Insurance Act, or any principal department of such public unit, (1) The creation of which subdivision or department has been expressly authorized by State statute, (2) to which some functions of government have been delegated by State statute, and (3) to which funds have been allocated by statute or ordinance for its exclusive use and control. It also includes drainage, irrigation, navigation, improvement, levee, sanitary, school or power districts, and bridge or port authorities and other special districts created by State statute or compacts between the States. Excluded from the term are subordinate or nonautonomous divisions, agencies, or boards within principal departments.

[32 FR 10408, July 14, 1967, as amended at 34 FR 247, Jan. 8, 1969; 45 FR 23646, Apr. 8, 1980]

§ 330.9 Joint accounts.

(a) Separate insurance coverage. Deposits owned jointly, whether as joint tenants with right of survivorship, as tenants by the entireties, as tenants in common, or by husband and wife as community property, shall be insured separately from deposit accounts individually owned by the coowners.

(b) Qualifying joint accounts. A joint deposit account shall be deemed to exist, for purposes of insurance of accounts, only if each coowner has personally executed a deposit account signature card and possesses withdrawal rights. The restrictions of this paragraph shall not apply to coowners of a time certificate of deposit or to