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85 y ~Eifth draft. jj REGULATION No.-7-a. F E D U A L R E S E R V E B O A R * & Washington, 1. C . . *K? Section 19 of the Federal Reserve Act provides in part as follows: ''Demand deposits within the meaning of this act shall com prise all deposits payable within 30 days, and time deposits shall comprise all deposits payable after 30 days, and all savings accounts and certificates of deposit which are sub ject to not less than 30 days' notice before payment. . . . . . f. It is not the purpose of the Board to countenance or permit the reduction of reserves to 5% on deposits that it construes to be demand deposits within the meaning of Section 19 of the Federal Reserve Act, upon any theory that such deposits become time deposits by virtue of a blanket provision in the by-laws of a bank stipulating that in time of emergency 30 days notice of withdrawal .may be required as to deposits which are ordinarily subject to check without restriction. The loard therefore deems it advisable to amplify Regulation No. 7, and to define in greater detail 1 : Time deposits, open accounts, 2:. Savings Accounts, 3: Certificates *f Deposit, 1. TIME DEPOSITS. OPEN ACCOUNTS. Under this head are included all accounts not evidenced by certificates of deposit or savings passbooks which may under agreement be checked upon or with drawn only upon written notice given by the depositor a certain specified number of days in advance, in no case less than 30 days, such an agreement to be in the form of a written contract entered into with the depositor at the time the de posit is made. Where it is provided that a deposit may be withdrawn by check . f (2) within 50 days, such deposit.will he held to he a demand deposit irrespective of the fact that the hank has the right by written contract or Otherwise to require a withdrawal notice of more than 50 days. In other words, no deposit shall he deemed a time deposit unless it he withdrawable only at a date or period more than 30 days subsequent to the date as of which the reserve is tj}j be calculated. 2. SAVINGS ACCOUNTS. Savings accounts are held to include all interest hearing accounts carried under written contracts, which contracts may appear on the face or back of sig nature cards signed by the depositor, or may be printed in the passbook issued to the depositor, under terms of which contract the depositor is required to present his passbook with'each check drawn, and such contracts to contain a clause subjecting the account to at least 30 days notice, at the option of the bank, before withdrawal. No account shall be deemed a savings account if the presentation of the passbook is not required at the time of the payment Of a check or withdrawal of the deposit. .3. TIME CERTIFICATES OF DEPOSIT. Time certificates of deposit are defined as instruments evidencing a de posit with a bank of a certain specified amount .repayable to the payee named in the face of the instrument, oithor with or without interest, on a certain specified date or after the lapse of a certain specified time after date of the. instrument (such time or date being not less than 30 days after the date as of * which the reserve is calculated). No deposit which is subject to chock or which may bo ropaid in whole or in part without the surrender of the certifi cate properly endorsed shall be deemed to bo a certificate of deposit.
@FedFRASER