12 U.S.C. § 4306: Payment of interest

Summary

Banks and other depository institutions must figure interest on the entire account balance each day of the stated calculation period, using the interest rate or rates they disclosed. They are free to use any method to compound or credit interest, and interest must start no later than the business day set for interest-bearing accounts in section 4005 of this title, following subsections (b) and (c) of that section.

Title 12, §4306

Banks and Banking, Source: USLM XML via OLRC

(a)Calculated on full amount of principal

Interest on an interest-bearing account at any depository institution shall be calculated by such institution on the full amount of principal in the account for each day of the stated calculation period at the rate or rates of interest disclosed pursuant to this chapter.

(b)No particular method of compounding interest required

Subsection (a) shall not be construed as prohibiting or requiring the use of any particular method of compounding or crediting of interest.

(c)Date by which interest must accrue

Interest on accounts that are subject to this chapter shall begin to accrue not later than the business day specified for interest-bearing accounts in section 4005 of this title, subject to subsections (b) and (c) of such section.

Notes & Related Subsidiaries

Editorial Notes

Amendments

1992—Subsecs. (a), (c). Pub. L. 102–550 made technical amendment to references to “this chapter” to reflect correction of corresponding provision of original act.

Statutory Notes and Related Subsidiaries

Effective Date

of 1992 AmendmentAmendment by Pub. L. 102–550 effective as if included in the Federal Deposit Insurance Corporation Improvement Act of 1991, Pub. L. 102–242, as of Dec. 19, 1991, see section 1609(a) of Pub. L. 102–550, set out as a note under section 191 of this title.

§4306 Payment of Interest