Full text of Mimeograph Letters and Statements of the Board : Letter From Secretary Morrill re Maximum Interest Rates Payable on Deposits at Foreign Branches of Member Banks, Number X-9157, Volume 42, Page 250

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FEDERAL RESERVE BO ARD
WASHINGTON
ADDRESSOFFICIALCORRESPONDENCETO
THEFEDERALRESERVEBOARD

X-9157
March 21, 1935.

Dear Sir:
Under date of February 8, 1935 (X-9118), you were
advised that the Federal Reserve Board had prescribed a
maximum interest rate of 4 $ per annum on savings deposits
and 6% per annum on other time deposits payable only at
offices of member banks located outside of the United States.
The Board has now decided to permit offices of mem­
ber banks located in China and in the British Crown Colony
of Hong Kong to pay interest at a rate not in excess of 7%
per annum on time deposits other than savings deposits, and
a copy of the amended authorization is attached.
Very truly yours,

Y y ~)o

Inclosure,

 TO ALL


FEDERAL RESERVE AGENTS

Chester Morrill,
Secretary.

w

JUL

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X-9l57-a
March 21, 1955.
M A X I M RATES OF INTEREST PAYABLE ON TIME AND SAVINGS
DEPOSITS OUTSIDE OF THE UNITED STATES.
Under the provisions of Regulation Q (paragraph (5) of subsec­
tion (c) of Section III and paragraph (5) of subsection (c) of Sec­
tion V), a member bank may pay interest on a time or savings deposit
which is payable only at an office of such bank located outside of
the States of the United States and of the District of Columbia at
a rate not exceeding the maximum rate set forth in Regulation Q "or
such higher maximum rate as may be prescribed by the Federal Re­
serve Board from time to time for payment in the locality in which
such office is located".
In accordance with these provisions of Regulation Q, the Fed­
eral Reserve Board hereby prescribes the following maximum rates of
interest which may be paid by member banks on time and savings de­
posits payable only at offices of such banks located outside of the
States of the United States and of the District of Columbia:




(a)

On savings deposits as defined in Regulation

Q, a rate not in excess of 4 p e r cent per annum, com­
pounded quarterly, regardless of the basis upon which
such interest may be computed}
(b)

On time deposits as defined in Regulation Q,

except as provided in paragraph (c) below, a rate not
in excess of 6 per cent per annum, compounded quarterly,
regardless of the basis upon which such interest may be
computed}

X -9 1 5 7 **
-2-

(c)

On time deposits as defined in Regulation Q,

payable only at offices of such banks located in the
Republic of China or in the British Crown Colony of
Hong Kong, a rate not in excess of 7 per cent per annum,
compounded quarterly, regardless of the basis upon which
such interest nay be computed.
Such maximum rates of interest shall be effective March 16, 1935,
and until such time as different rates may hereafter be prescribed by
the Federal Reserve Board.
The above are the maximum rates of interest which may be paid
by member banks on such deposits in places outside of the States of
the United States and of the District of Columbia.

However, the Fed­

eral Reserve Board will expect that no member bank will pay interest
on any such deposit at a rate in excess of that paid on deposits of a
like class by corapeting institutions situated in the locality in
which such payment of interest is made.