[Code of Federal Regulations]

[Title 12, Volume 6]

[Revised as of January 1, 2006]

From the U.S. Government Printing Office via GPO Access

[CITE: 12CFR707.7]



[Page 440]

 

                       TITLE 12--BANKS AND BANKING

 

            CHAPTER VII--NATIONAL CREDIT UNION ADMINISTRATION

 

PART 707_TRUTH IN SAVINGS--Table of Contents

 

Sec. 707.7  Payment of dividends.



    (a) Permissible methods--(1) Balance on which dividends are 

calculated. Credit unions shall calculate dividends on the full amount 

of principal in an account for each day by use of either the daily 

balance method or the average daily balance method. Credit unions shall 

calculate dividends by use of a daily rate of at least \1/365\ of the 

dividend rate. In a leap year a daily rate of \1/366\ of the dividend 

rate may be used.

    (2) Determination of minimum balance to earn dividends. A credit 

union shall use the same method to determine any minimum balance 

required to earn dividends as it uses to determine the balance on which 

dividends are calculated. A credit union may use an additional method 

that is unequivocally beneficial to the member.

    (b) Compounding and crediting policies. This section does not 

require credit unions to compound or credit dividends at any particular 

frequency.

    (c) Date dividends begin to accrue. Dividends shall begin to accrue 

not later than the day specified in section 606 of the Expedited Funds 

Availability Act (12 U.S.C. 4005) and implementing Regulation CC (12 CFR 

part 229). Dividends shall accrue on funds until the day funds are 

withdrawn.



(Approved by the Office of Management and Budget under control number 

3133-0134)



[58 FR 50445, Sept. 27, 1993, as amended at 61 FR 114, Jan. 3, 1996]