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My mother is in an assisted living facility now.  I need to cash out some certificates of deposit which will have the early withdrawal penalty.  Somebody told me the FDIC has a rule that the bank can't do that if the owner is in a long term care facility.  I can't find the rule or any other information.  Does anyone know?  I don't want to pay the penalty but I need to cash the CD.

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Talk to the bank directly and ask nicely, presenting them with a doctor's note.

There's no requirement that the bank have to waive the penalty but typically, they will for major life events.

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shadow1woman said:   My mother is in an assisted living facility now.  I need to cash out some certificates of deposit which will have the early withdrawal penalty.  Somebody told me the FDIC has a rule that the bank can't do that if the owner is in a long term care facility.  I can't find the rule or any other information.  Does anyone know?  I don't want to pay the penalty but I need to cash the CD.
  I am not aware of any FDIC rule that applies.
You may have better luck contacting the bank directly for a waiver of penalty based on the circumstances (ask for an exception/waiver).
ETA: Zennuts typed faster and said essentially the same.

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https://www.ibat.org/legal-ease/2013/02/deposit-accounts-certifi...

Here's a good 101 from the Independent Bankers Association of Texas. I am not from Texas nor am I a banker, but I did run into a somewhat similar situation a few years ago.

Long story short: the bank *can* choose to waive the early withdrawal penalty, nothing I'm aware of *requires* them to do so.

Bit more: The penalty is both a requirement from their financial governing agency (so that they can lend on the time deposit more than a transaction account for capital calculation purposes), as well as a profit center. There are minimum penalties they can only waive in certain situations (e.g. person declared incompetent), but nothing compels them to do so. Recommend a quick stop by the branch (speak with manager) or call into call center.

I sincerely doubt the average teller at your bank is aware of the various FDIC/NCUA/RTC rules governing timed deposits (other than the plain language stuff in the bank account documents) so please ask for a manager if they don't get you anywhere. Being nice also helps. Good luck!

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Thank you very much for the information thus far. I do have a doctors letter explaining. The tellers seem to be a bit "green". They mean no harm, just doing their job. I just don't want to have to pay if it is not necessary. She may need that money going forward.

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The penalty is typically 6 months worth of interest. I suspect the CD doesn't have a very high interest rate, considering that the best savings rates have been near 1% for 7 years, so how much of a penalty are we talking here, really?

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Over $600 in money for each one. Maybe that is nothing to some but to others like my mother that is a large amount.

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shadow1woman said:   Over $600 in money for each one. Maybe that is nothing to some but to others like my mother that is a large amount.Is that 6 months worth of interest, or is the penalty calculated differently?

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It is a large CD and old. Not sure how many months worth of interest, I figure 3 months. Don't really see how that matters though. It would be in the best interest of the bank, (no pun intended) to get rid of us. I thought rather than punish us they would be happy to cash it out and save them some cash.

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shadow1woman said:   It is a large CD and old. Not sure how many months worth of interest, I figure 3 months. Don't really see how that matters though. It would be in the best interest of the bank, (no pun intended) to get rid of us. I thought rather than punish us they would be happy to cash it out and save them some cash.
  Is it possible to sell CDs? If so, maybe you could get more than face value from someone that wants a better rate.

Or could you borrow against it? Can you get a better loan rate than what the bank is paying you now?

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BBr those are really good ideas but, I need the cash out.  That might work if I didn't need the cash.

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shadow1woman said:   BBr those are really good ideas but, I need the cash out.  That might work if I didn't need the cash.
  As long as you end up with cash, what difference does it make if you sell it verses close it out?

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shadow1woman said:   BBr those are really good ideas but, I need the cash out.  That might work if I didn't need the cash.
I think what BBR is suggesting is getting a loan secured by the CD, much like a mortgage is a loan secured by a house.  If you can get a loan at 4% when the bank is paying you 5%, you're earning a profit while still getting the cash you need.

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shadow1woman said:   BBr those are really good ideas but, I need the cash out.  That might work if I didn't need the cash.
  
Ok, some confusion here.

What's the principal balance of the CD?  What's the interest rate?  What's the maturity date?

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They are going to waive the fee on one of them and will let me know about the other one. I explained in great detail how she has broken a hip, has lots of medical bills this year ect. Thanks to all for your help.

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