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F ederal Reserve Bank o f Dallas DALLAS, TEXAS 75222 C irc u la r No. 76-42 M arch 25, 1976 American ((evolution Bicentennial IN D IV ID U A L RETIREM ENT ACCOUNTS (IR A ) AND KEOGH ACCOUNTS TO TH E CHIEF EXEC UTIVE OFFICER OF A L L MEMBER BANKS IN THE ELEVENTH FEDERAL RESERVE D IS T R IC T : As you know , recent legislation (P ublic Law 93-406) has authorized the establishm ent of tax d e fe rre d In d iv id u a l R etirem ent Accounts (IR A ) by persons who do not have retirem en t program s at th e ir place of w o rk . In Decem ber, the Board of G overnors of the Federal R eserve System amended Regulation Q to facilitate the o ffe r ing of such accounts by member banks in the form of time and savings deposits and many ban ks, as w ell as other fin an cial in stitu tio n s, a re now offering IRA plans in deposit form . Su bsequ ently, the Board has received numerous requests from member banks that consideration be g iv e n to the elim ination of the interest rate c e ilin g d iffe r entials between commercial banks and th r ift institutions on IRA accounts. Many of these requests assert that the ex is tin g d iffe re n tia l puts bank depositors at a s ig n ifi cant disadvantage v is - a -v is the deposit customers of th r if t in stitu tio n s, and as a re s u lt these banks believe that they a r e unable to compete effe ctively for IRA depos its. Some of these letters suggest that IRA dep osits, because of th e ir lo n g -term , special tax status, and Congressional intent a re a unique form of deposit and should be treated d iffe re n tly from other tim e and savings deposits. In a d d itio n , sim ilar sentiment has been expressed re g a rd in g Keogh plans offered by banks in the form of time and savings deposits. As a resu lt of these le tte rs , the Board of G overnors is conducting a su rve y of the amount of IRA and Keogh deposits at member banks in o rd e r to obtain inform ation reg ard in g the d eg ree to w hich re la tiv e c e ilin g rates may have affected banks' a b ility to attrac t such deposits. T h e Federal Deposit Insurance C orporation is jo in in g the Federal R eserve in this s u rv e y . T h e Fed eral Home Loan Bank Board is also collecting data on IRA and Keogh deposits from savings and loan associations. I w ould, th e re fo re , g re a tly app reciate yo u r com pleting one of the two enclosed forms w ith data as of M arch 31 and re tu rn in g it to the Federal R eserve Bank of Dallas in the enclosed, p re -a d d re s s e d envelope by A p r il 14. T h e second copy of the form is for yo u r file s . Even if you have n eith er IRA nor Keogh deposits out standing at the s u rv e y d ate, please check the a p p ro p ria te box and re tu rn one copy of the re p o rtin g form . This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org) - 2 - Questions re g a rd in g this s u rv e y should be d irected to B ill G re tn in our Research D epartm ent. You may telephone M r . G re e n , co llect, at (214) 651-6394 for assistance. I ap p re cia te y o u r cooperation in o u r endeavor to collect tne Inform ation necessary to make an accurate evaluation o f this issue. S in c e re ly y o u rs , Ernest T . Baughman P resident Enclosures (3) FR 1129 OMB A p p ro v a l No. 5 5 - S76002 E x p ir e s May 1976 Name o f Bank C ity , S t a t e , ZIP Code SURVEY OF OUTSTANDING AMOUNTS OF INDIVIDUAL RETIREMENT ACCOUNTS (IRA) AND KEOGH ACCOUNTS AS OF MARCH 3 1 , 1976 ( P le a s e re a d i n s t r u c t i o n s on r e v e r s e ) DOES YOUR BANK HAVE OUTSTANDING EITHER INDIVIDUAL RETIREMENT ACCOUNTS (IRA) OR KEOGH ACCOUNTS IN THE FORM OF TIME AND SAVINGS DEPQSXTS. No Yes IF YOU HAVE NEITHER FORM OF ACCOUNT. PLEASE INDICATE THE NAME OF THE PERSON PREPARING THIS REPORT AND RETURN IT TO THE FEDERAL RESERVE BANK OF DALLAS IF YOU HAVE OUTSTANDING EITHER IRA OR KEOGH ACCOUNTS IN THE FORM OF TIME AND SAVINGS DEPOSITS, PLEASE PROVIDE THE INFORMATION REQUESTED BELOW AND RETURN THE FORM TO THE FEDERAL RESERVE BANK OF DALLAS. Type o f M a tu r ity o f D e p o s it I n d iv id u a l R e tire m e n t A cco u n ts M ils . 1. S a v in g s d e p o s i ts 2. T in e d e p o s i t s w ith o r i g i n a l m a t u r i t i e s o f : a, 30 d a y s up to b u t n o t in c l u d in g 4 y e a r s b. 4 y e a r s up to b u t n o t I n c lu d in g 6 y e a r s c. 6 y e a r s and o v e r 3. T o ta l (sum o f l i n e s 1, 2 a , 2 b , and 2c) 4. T o ta l number o f a c c o u n ts T h o u s. Keogh A cco un ts M ils . T hous. RETURN ONE COPY TO: RESEARCH DEPARTMENT FEDERAL RESERVE BANK OF DALLAS DALLAS, TEXAS 75222 NO LATER THAN APRIL 14. 1976 (Name o f p e rs o n p r e p a r in g t h i s r e p o r t , p le a s e p r i n t ) J__ L (T elep h o n e number in c lu d in g a r e a code and e x te n s io n ) GENERAL INSTRUCTIONS R e p o rt a l l d e p o s it b a la n c e s r e q u e s te d a s o f th e c lo s e o f b u s in e s s March 3 1 , 1976, to th e n e a r e s t th o u sa n d d o l l a r s . A ll f i g u r e s m ust r e f l e c t th e c o n s o l i d a t i o n o f a l l b ra n c h e s l o c a te d in th e S t a t e s o f th e U n ite d S t a t e s and th e D i s t r i c t o f C olum bia and any d o m e s tic nonbank s u b s id ia r y o f th e bank lo c a te d i n th e S t a t e s o f t h e U. S . , th e D i s t r i c t o f C o lu m bia, o r any U. S . t e r r i t o r y o r p o s s e s s io n t h a t i s c o n s o lid a te d f o r t h e C o n s o lid a te d (D o m e stic ) R e p o rt o f C o n d itio n ( C a ll R e p o rt) f i l e d by th e r e p o r t i n g b an k . P le a s e EXCLUDE any t r u s t d e p a rtm e n t a d m in is te r e d I n d i v i d u a l R e tire m e n t A ccount o r Keogh fu n d s t h a t a r e n o t in th e form o f tim e and s a v in g s d e p o s i t s a t y o u r b a n k . I f th e r e p o r t i n g bank h a s no IRA o r Keogh A cco u n ts i n s p e c i f i c c a t e g o r i e s r e q u e s te d on th e r e p o r t , p le a s e w r i t e th e word "n o n e" f o r t h a t ty p e o f a c c o u n t o r m a t u r i t y . I f th e r e p o r tin g bank h a s n e i t h e r IRA n o r Keogh d e p o s i t s i n t h e form o f tim e and s a v in g s d e p o s i t s , p le a s e ch e c k th e box so i n d i c a t i n g and r e t u r n t h e form to th e F e d e r a l R e se rv e Bank o f D a l l a s . DEFINITIONS INDIVIDUAL RETIREMENT ACCOUNTS (IRA) a r e s p e c i a l d e p o s i t s w h ich p e r m it th o s e i n d i v i d u a l s who do n o t hav e r e ti r e m e n t p ro gram s a t t h e i r p l a c e o f work to d e f e r incom e ta x e s on am ounts e q u a l to th e fu n d s d e p o s ite d t h e r e t o (and th e e a r n in g s t h e r e o n ) . A nnual d e p o s i t s to IRA a c c o u n ts may n o t ex ceed 15Z o f n e t e a r n in g s o r $ 1 ,5 0 0 ,w h ic h e v e r i s s m a l l e r . KEOGH ACCOUNTS (HR-10) a r e s i m i l a r to IR A 's b u t a r e e s t a b l i s h e d by s e lf-e m p lo y e d I n d i v i d u a l s , f o r th e m s e lv e s a n d /o r t h e i r e m p lo y e e s, and th e maximum a n n u a l d e p o s i t may n o t exceed 15% o f n e t e a r n in g s from s e lf-e m p lo y m e n t, o r $ 7 ,5 0 0 , w h ic h e v e r i s s m a l le r . Time and s a v in g s d e p o s it s a r e d e f in e d i n th e i n s t r u c t i o n s t o t h e R e p o rt o f C o n d itio n (C a ll R e p o r t) . SAVINGS DEPOSITS h ave no s p e c i f i e d m a tu r i ty and t h e r e i s no re q u ire m e n t f o r th e d e p o s ito r to g iv e p r i o r w r i t t e n n o t i c e o f an i n t e n t i o n to w ith d ra w f u n d s . H ow ever, th e b a n k , a t i t s o p tio n , may a t any tim e r e q u i r e d e p o s i t o r s h o ld in g s a v in g s d e p o s i ts to g iv e w r i t t e n n o t i c e o f an in te n d e d w ith d ra w a l n o t l e s s th a n 30 d a y s b e f o r e su c h w ith d ra w a l i s to be m ade. I n c o n t r a s t , TIME DEPOSITS h av e e i t h e r a minimum m a t u r ity o f a t l e a s t 30 d a y s , o r a f ix e d m a t u r i t y , o r a r e w ith d ra w a b le a f t e r a s p e c i f i e d p e r io d f r o p d a t e o f d e p o s i t , o r f o l lo w ing e x p i r a t i o n o f a p e r io d o f n o t i c e o f in te n d e d w ith d ra w a l g iv e n i n w r i t i n g by th e d e p o s ito r. NUMBER OF ACCOUNTS a r e th e t o t a l number o f s e p a r a t e IRA o r Keogh a c c o u n ts i n th e form o f tim e and s a v in g s d e p o s i t s .
@FedFRASER