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FED ERAL R E SER VE BANK OF NEW YORK f C ircular No. 4 3 9 4 "1 L D ecem ber 3, 1956 J INTEREST ON TIME AND SAVINGS DEPOSITS New Supplement, Effective January 1, 1957, to Regulation Q To all Member Banks in the Second Federal Reserve District: The B oard of Governors of the Federal Reserve System today adopted a new Supple ment, effective Jan u a ry 1, 1957, to its Regulation Q. By this action, the B oard increased the maximum rates of interest th a t may be paid by member banks on savings deposits, and on time deposits payable in 90 days or more. Sim ilar action was also taken by the Federal Deposit Insurance Corporation in increasing the rates th at may be paid by nonmember banks insured by th a t corporation. The text of a jo in t statem ent issued today by the B oard of Governors and the FD IC concerning these changes is as follows: The B oard of Governors of the F ederal Reserve System and the F ederal Deposit Insurance C orporation today changed the m aximum perm issible rates of interest payable by member banks of the Federal Reserve System and nonm em ber banks insured by the F D IC on savings deposits and tim e deposits and certificates as follows, effective J a n u a ry 1, 1957: Savings d e p o s its ................................ Time deposits and certificates, 6 months or m o r e .............................. Time deposits and certificates, 90 days to 6 m onths ........................ Maximum permissible rate, at present Maximum permissible rate, effective January 1,195? %V2% 3% 2% % 3% 2 % 2 No change was made in the m aximum perm issible rate, now 1 per cent, payable on time deposits and certificates of less than 90 days. Enclosed is a copy of the Supplement, effective Jan u a ry 1, 1957, to Regulation Q. Additional copies of the supplement and of this circular will be furnished upon request. A lfred H ayes, President. S U P P L E M E N T T O R E G U L A T IO N Q ISSUED BY T H E BOARD OP GOVERNORS OF T H E FEDERAL RESERVE SYSTEM Effective January 1, 1957 MAXIMUM RATES OF IN T ER EST PAYABLE ON TIM E AND SAVINGS DEPOSITS BY MEMBER BANKS OF T H E FED ERA L RESERV E SYSTEM P u rsu an t to the provisions of section 19 of the F ederal Reserve A ct and section 3 of its R egulation Q, the B oard of Governors of the F ederal Reserve System hereby prescribes the following maximum rates 1 of interest payable by member banks of the F ederal Reserve System on time and savings deposits: (1) M axim um rate of 3 per cent.—No member bank shall pay in ter est accruing a t a ra te in excess of 3 per cent per annum , compounded q u arterly , 2 regardless of the basis upon which such interest may be computed,— (A ) On any savings deposit, (B ) On any tim e deposit having a m atu rity date six m onths or more a fte r the date of deposit or payable upon w ritten notice of six m onths or more, (C ) On any P ostal Savings deposit which constitutes a time deposit. (2) M aximum ra te of 2l/ 2 p er cent.—No member bank shall pay interest accruing at a rate in excess of 2 * 4 per cent p er annum , com pounded q u arterly , regardless of the basis upon which such interest may be computed,— (A ) On any tim e deposit (except Postal Savings deposits which constitute tim e deposits) having a m atu rity date less than six m onths and not less than 90 days afte r the date of deposit or payable upon w ritten notice of less th an six months an d not less th an 90 days. (3) M axim um rate of 1 p er cent.—No member bank shall pay interest accruing a t a rate in excess of 1 p er cent p er annum , com pounded q u arterly , regardless of the basis upon which such interest may be computed,— (A ) On any time deposit (except P ostal Savings deposits which constitute time deposits) having a m atu rity date less than 90 days a fte r the date of deposit or payable upon w ritten notice of less th an 90 days. 1 T h e m axim um ra te s of in te re st payable by m em ber banks of th e Federal Reserve System on tim e an d savings deposits as prescribed herein a re n o t applicable to any deposit w hich is payable only a t a n office of a m em ber ban k located outside of th e S tates of th e U nited S tates and th e D istric t of Colum bia. 2 T his lim itatio n is n o t to be interpreted as p reventing the com pounding of in te re st a t o th er th a n q u arterly intervals, provided th a t the ag g reg ate am o u n t of such interest so compounded does n o t exceed th e ag g reg ate am o u n t of interest a t th e ra te above prescribed when com pounded quarterly. PR IN TE D I N N EW YO« K FED ERAL R E SER VE BANK OF NEW YORK December 4, 1956 To the Member and Nonmember Clearing Banks o f the Second Federal Reserve D istrict: We are inform ed by the Comptroller of the Currency that The Home National Bank of Ellenville, Ellenville, New York, was declared insolvent and placed in the hands of the Federal Deposit Insurance Corporation as receiver today. We understand that items recently forw arded to th at bank with our cash letters are being returned unpaid. A l f r e d H a y e s , President.
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