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94 INTERPRETATION BM~KING X-9429 ACT OF 1935 (Copies to be sent to all Federal Reserve banks) January 11, 1956 ----:-::---~----= Cashier, ____ National Bank and Trust Company of _____ , _____ ------, Dear Sir: This refers to your letter dated December 26, 1935, regarding the interpretation of certain provisions of R.::gula.tion Q, as revised effective January 1, 1956• It is understood that several of your depositors which are business corporations carry interest accounts and you wish to be advised whether, under the supplement to Rt:Jgula tion ;,, you will be allowed to issue a certificate of de~'osi t having a maturity at least 6 months after tho dato of duposit and continue to pay interest thereon at your present rate of 2t per cent. A time certificate of deposit which complies with tho definition contnined in section l(c) of Rogulation (.,! and which hes a maturity date 6 months or more after the date of deposit or is payable upon written notice of 6 months or more may bear interest at a rate not r:;xcooding 2~- per cent per annum. You olso state that under your present arrangement no interest is paid on ~~ny savings account unless the same :1as b00n on deposit 6 months or loni:er and thc:.t 30 days' notice is required for withdrawr:.l. It is understood that ;vou wish to be ::tdvisod whether you may continue to usc pass books with r. six months 1 vli thdrmval provision to evidence 95 -.2- .. X-9429 the accounts of business corporations. The Board sees no objec- tion to the use of a pass book to evidence n "time deposit, open account" of a business corporation or other depositor and, if such deposit complies with the definition contained in section l(d) of Regulation Q, the bank may pHy interest thereon at a rate not excecding the applicable maximum rate proscribed for time deposits in the supplement to Regulation Q. Such a deposit of a business corporation could not, of course, be classified as a savings deposit even though a pn.ss book wore used in connection therewith, and the bank could not pay 2! per cent interest ther8on unless the written contract betvmen the bank and the depositor, which might be stated in tho pass book or elsewhere, provided that neither the whole nor withdrawn except upon If y:)U any part ·')f' such dcposi t could bo n0ticc of not less than 6 months. writt~n havo any further questions with regard to this mat- ter or any similar matter, it will be approci:;.tcd if you will communicate with tho FGderal Reserve Bank o f - - - - - - ' which will be glad to answer your inquiries. Vory truly yours, (Signed) Chester Morrill Chester i1Iorrill, Sccr0tary.
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