$545.2-1 Bonus on savings accounts.

(a) Creation of bonus plan. The members of a Federal association which has a charter not inconsistent with the provisions of this section may, by bylaw provision, obligate the association to pay a bonus for regular payments on savings accounts. Thereafter, any member of such association desiring a bonus shall agree to make regular monthly payments of a specified amount on a savings account until the withdrawal value thereof is equal to at least 200 times the agreed monthly payment, and if the agreed monthly payments are made each and every month thereafter until the withdrawal value of such savings account is equal to at least 200 times the agreed monthly payment, without a delay of more than 60 days in the payment of any monthly payment and without any prepayment of more than 12 months, and if within such period no application has been made for withdrawal of any part of such savings account, the bonus shall be payable on the date on which the withdrawal value of such savings account equals or exceeds 200 times the agreed monthly payment. The bonus rate on such savings account shall be 1 percent per annum and the amount of the bonus shall be determined as follows:

Divide the dollar amount of each semiannual distribution of earnings on such savings account by a figure equal to the annual rate of each such semiannual distribution; and the amount of the bonus shall be the sum of the quotients obtained: Provided, however, That if a member who has agreed to make regular monthly payments on a savings account under this plan shall apply for the withdrawal of such account in part or in full, or shall fail to meet any of the other terms of the bonus agreement after such account shall have reached (1) at least 50, but less than 100, times the agreed monthly payment on such account in accordance with the terms of the agreement, such member shall be entitled to receive, in addition to the withdrawal value of such account, a bonus equivalent to 25 percent of the amount of the reserve for bonus which is, at the time of such withdrawal, properly allocable to such account; (2) at least 100, but less than 150 times the agreed monthly payment, 50 percent of such amount; and (3) at least 150, but less than 200, times the agreed monthly payment, 75 percent of such amount.

(b) Existing bonus rights. The holder of a savings account of a Federal association which has a Charter K and which amends such charter by the adoption of Charter N shall, upon the exchange of such savings account for a savings account issued under Charter N, have the rights and privileges, and be subject to the duties and liabilities, provided in this section, as if originally created under the provisions hereof: Provided, That the savings account so exchanged entitled the holder thereof, at the time of such exchange, to an interest in any reserve for bonus created under the provisions of such Charter K.

(c) Bonus operations. A Federal association that has a Charter not inconsistent with the provisions of this section may credit to the accounts of all members holding bonus accounts in good standing, that amount in the bonus reserve to which they would be entitled if their bonus accounts were withdrawn at the time of such credit, and may transfer to surplus or to other reserves any other amounts in any Reserve for Bonus, and further bonus earnings shall be credited to the accounts of the members thereto entitled.

(d) Abolition of bonus plan. The bonus plan provided by this section is abolished except as to accounts opened prior to January 15, 1968.

[23 F.R. 9899, Dec. 23, 1958, as amended at 32 F.R. 17926, Dec. 15, 1967]

§ 545.2-2 48-to-96-month bonus plan.

(a) Offering the plan. A Federal association may offer the bonus plan under this section by a resolution of its board of directors if the plan is consistent with its charter, and a Federal association shall offer the bonus plan under this section if its bylaws include the provisions of paragraph (f) of § 544.6 of this chapter.

(b) Qualification for bonus. An account qualifies under this section if:

(1) At the time the account is opened, the member gives to the association a signed statement of intention to make regular monthly payments of a specified amount to the account;

(2) The member opens the account by making the first monthly payment;

(3) The member makes the regular monthly payments without delay of more than 90 days as to any such payment; and

(4) No withdrawals have been made from the account.

(c) Bonus rate. The association's board of directors shall determine a bonus rate not in excess of 1 percent per annum, subject to the following provisions:

(1) A reduction in the bonus rate shall not apply to accounts which were opened prior to the effective date of the reduction;

(2) An increased bonus rate shall apply to all accounts which qualify under this section from the effective date of the increase; and

(3) A change in the bonus rate may become effective only at the beginning of a future distribution period.

(4) A bonus rate may not be fixed which, when added to other earnings at the time such rate is fixed, would cause any applicable regulatory maximum rate of return to be exceeded.

(5) For any distribution period in which other earnings on the account, when added to the bonus, would cause any applicable regulatory maximum rate of return to be exceeded, the bonus rate shall be reduced to such rate as will cause total earnings on the account to equal the applicable regulatory maximum rate of return.

(d) Bonus earnings. (1) A bonus is earned on and shall be credited together with all other earnings, to accounts which qualify under this section:

(1) At one-half of the bonus rate for distribution periods which begin during the 48-month period from the date the account is opened, but no bonus for the first 12 months of such period shall be earned or credited until the end of the distribution period in which the expiration of such first 12-month period occurs; and

(ii) At the full bonus rate for distribution periods which begin 48 months or more from the date the account is opened, but no bonus is earned for any distribution period which begins 96 months or more from such date.

(2) A bonus earned under this section shall be computed as of the same dates and in the same manner as are other earnings for distribution.

(3) A bonus shall not be earned under this section on any account which earns any other bonus or a variable rate.

(e) Prepayment of regular monthly payment. The association shall not accept a prepayment of a regular monthly payment more than 90 days in advance.

(f) Options with respect to the plan. The association's board of directors may,

by resolution, with respect to accounts not opened on or before the date of such resolution:

(1) Terminate the plan under this section if the association's bylaws do not include the provisions of paragraph (1) of 544.6; or

(2) Fix either or both a minimum and maximum amount of regular monthly payments.

(g) Certificate. The association shall issue, to each member who opens an account pursuant to this section, a certificate attached to or incorporated in an account book and containing the following language:

This certifies that (name of member) holds a 48-to-96-Month Bonus Plan Account which is subject to the provisions of § 545.2–2 of the rules and regulations for the Federal Savings and Loan System.

(h) Existing bonus rights. A Federal association which, prior to January 15, 1968, has outstanding bonus agreements shall continue to respect the provisions thereof and distribute bonus payments thereunder. On or after such date, no Federal association shall make any bonus agreement other than as provided in this section or in paragraph (b) of § 545.3. [32 F.R. 17926, Dec. 15, 1967, as amended at 33 FR. 360, Jan. 10, 1968]

§ 545.3 Bonus on monthly-payment and fixed-balance accounts.

(a) Monthly-payment accounts. The board of directors of a Federal association which has a charter in a form which is not inconsistent with the provisions of this section and which has bylaws that include the provisions of § 544.6(e) of this chapter may determine that, in addition to other earnings distributed on savings accounts, such association shall distribute a bonus to the holder of each savings account who makes regular, equal, monthly payments for a period of not less than 36 months nor more than 96 months without delay of more than 60 days in any payment and without prepayment of more than 12 payments and without withdrawal of any part thereof or of any earnings credited thereon; such bonus shall be computed as of the same dates and in the same manner as are other earnings for distribution, and shall thereupon be credited to each such savings account, at the rate of 14 percent per annum for each dividend period which ends after the date of the first monthly payment on such account, to

and including the dividend period in which occurs the expiration of 36 months after the date of such first monthly payment, and at the rate of 2 percent per annum thereafter, to and including the dividend period in which occurs the expiration of the number of months stated in the statement of intention hereinafter required: Provided, That

(1) On or before the date of such first monthly payment, the holder of such savings account shall have given to the association a signed statement of intention to make payments of a specified amount for a stated number of months, which shall be not less than 36 nor more than 96, on such savings account in accordance with the provisions of this paragraph;

(2) After the expiration of the number of months stated in such statement of intention and so long thereafter as such specified monthly payments continue to be so made on such savings account, such Federal association, if its board of directors by resolution so determines, may continue, but shall not be obligated to continue, to distribute such bonus on such savings account;

(3) No bonus shall be distributed under this paragraph on any savings account on which a bonus is being distributed under any other provision of such Federal association's charter or of this Part; and

(4) The bonus plan provided by this paragraph is abolished except as to accounts opened prior to January 15, 1968.

(b) Fixed-balance accounts. The board of directors of a Federal association which has a charter in a form not inconsistent with the provisions of this section and which has bylaws which include the provisions of paragraph (e) of 544.6 of this chapter may determine that, in addition to other earnings distributed on savings accounts, such association shall distribute a bonus on accounts of such minimum amount, not less than $1,000, which are maintained for such minimum qualifying period, not less than 3 months nor more than 36 months, as may be determined in accordance with and subject to the provisions of this paragraph.

(1) Each such bonus account shall be evidenced by a certificate issued in the amount originally invested in the account.

(2) Each such certificate, whether incorporated in an account book or printed as a separate certificate, shall be in the

form prescribed pursuant to paragraph (b) of § 545.2 and shall also bear on its face the words: "A bonus is distributable on the amount of this certificate as provided in, and subject to, paragraph (b) of § 545.3 of the rules and regulations for the Federal Savings and Loan System, for which purpose the beginning of the qualifying period of months is

.." Each such certificate

(Date) shall also set forth the terms of any penalty required under subparagraph (4) of this paragraph.

(3) While the bonus account certificate remains outstanding, earnings other than the bonus shall be distributed by payment in cash to the account holder or by crediting the bonus account or another account at the regular distribution dates established for such bonus accounts. The bonus on the amount originally invested in such bonus account shall be so distributed upon expiration of the qualifying period. Thereafter, all earnings, including any bonus, on the amount in such bonus account shall be so distributed at such regular distribution dates.

(4) In the event of withdrawal of all or any portion of any such bonus account prior to the expiration of such qualifying period, the account holder shall receive earnings from the date of issuance of such account on the amount withdrawn at a rate not in excess of the regular rate then being paid, and shall pay a penalty in an amount not less than the lesser of (1) the earnings at such rate for 90 days (3 months) on the amount withdrawn or (ii) all earnings at such rate on the amount withdrawn. If any earnings have been distributed to the account holder prior to such withdrawal, a deduction shall be made from the amount withdrawn to adjust for the penalty applicable to such earnings.

(5) While such certificate remains outstanding, prior to the expiration of the qualifying period, a reserve for the bonus shall be maintained and appropriate credits and debits shall be made to such reserve at the regular distribution dates for such bonus accounts.

(6) The board of directors may fix a bonus rate not in excess of 0.75 percent per annum for any bonus plan offered by the association; but such board may not fix any bonus rate which, when added to the earnings otherwise distributable on a bonus account at the time such rate is fixed, would cause the total rate of

earnings on such bonus account to exceed the applicable maximum rate of return prescribed for certificate accounts in Part 526 of this chapter. For any distribution period in which the bonus rate, when added to the earnings otherwise distributable on a bonus account, would cause the total rate of earnings on such bonus account to exceed such applicable maximum rate of return, the bonus rate shall be reduced, to such rate as will cause the total rate of earnings to equal such applicable maximum rate of return, in accordance with the provisions of subdivision (iii) of subparagraph (9) of this paragraph.

(7) A Federal association may offer more than one bonus plan pursuant to this paragraph at any one time. Each member who, at the date of determination to offer any such bonus plan, holds a savings account with a balance of not less than the minimum amount determined for such bonus plan shall have the right, for a reasonable period of time, which period shall be fixed by resolution of the board of directors and shall be not less than 3 months after the date of mailing, posting, or publishing of the written notice required by subparagraph (8) of this paragraph, to exchange all or any qualified portion of such savings account for one or more certificates issued pursuant to the provisions of this paragraph and dated as of the date of exchange.

(8) The written notice of a particular bonus plan shall set forth the plan adopted. Such Federal association shall give such notice within not more than 30 days after the effective date of adoption of the plan by at least one of the following means:

(i) Mailing postage prepaid to each member described in subparagraph (7) of this paragraph at the last address appearing on the books of such Federal association;

(ii) Posting in a conspicuous place in each of the offices of the association for so long as the association continues to offer the plan; or

(iii) Publishing in a newspaper printed in the English language and of general circulation in the city or county in which each office of the association is located.

(9) The board of directors of such Federal association may by resolution:

(i) Fix the maximum dollar amount which may be held by any one account holder at any one time pursuant to this

paragraph, which maximum shall be applicable alike to each holder;

(ii) Discontinue the issuance of certificates pursuant to the provisions of this paragraph except to the extent that holders of savings accounts may exchange all or a qualified portion of their accounts in accordance with subparagraph (7) of this paragraph;

(iii) Reduce the rate or discontinue the distribution of any bonus on outstanding certificates issued under any bonus plan adopted pursuant to this paragraph by giving at least 30 days' written notice mailed to all holders of such certificates, but no such reduction or discontinuance shall be effective as to any certificate prior to the date as of which a bonus is next distributable on such certificate; and

(iv) Determine that if the association adopts a bonus plan pursuant to this paragraph which provides for a higher bonus rate than is provided by any existing bonus plan subject to this paragraph, the bonus on any account subject to such existing bonus plan shall be computed at the higher bonus rate from the date of adoption of such higher-rate bonus plan if such existing bonus account meets the minimum amount required to qualify for the higher-rate bonus plan.

(10) No bonus shall be distributed under this paragraph on any savings account on which a bonus or earnings at a rate higher than the regular rate are being distributed under any other provision of the association's charter or of this part.

[26 F.R. 5173, June 9, 1961, as amended at 32 F.R. 17927, Dec. 15, 1967; 35 FR. 3025, Feb. 14, 1970; 35 FR 7693, May 19, 1970; 38 FR 18460, July 11, 1973]

§ 545.3-1 Distribution of earnings at variable rates.

(a) General. Subject to the provisions of this section, the board of directors of a Federal association which has a charter in the form of Charter N or Charter K (rev.), after having determined the rate at which earnings will be distributed on its savings accounts for a distribution period, hereinafter referred to as the regular rate, may provide for the distribution of earnings for that period

(1) At a rate or rates lower than the regular rate, on any designated class or classes of savings accounts; and

(2) At a rate or rates higher than the regular rate, on savings accounts which

meet the eligibility requirements fixed by such board pursuant to paragraph (b) of this section and such additional requirements as such board may impose. (b) Eligibility requirements. The board of directors may, by resolution, provide for the distribution of earnings at a rate or rates higher than the regular rate only on savings accounts which meet the minimum requirements fixed by the board of directors pursuant to subparagraphs (1), (2), (3), and (4) of this paragraph and such additional requirements as the board of directors may impose, except that the board of directors shall not authorize the issuance of accounts evidenced by notice-account books pursuant to subparagraph (2) of this paragraph unless the association's charter contains the sentence specified in paragraph (b) of § 544.8 of this subchapter or the charter provision set forth in paragraph (a) of § 545.1-3.

(1) Accounts evidenced by account books other than notice-account books. For any distribution period for which the regular rate is less than the applicable maximum rate of return prescribed for regular accounts in Part 526 of this chapter, a savings account which is evidenced by an account book other than a notice-account book and is maintained at not less than $1,000 for a continuous period of not less than 12 months may receive earnings at a rate higher than the regular rate, but not in excess of the applicable maximum rate of return prescribed for regular accounts in said Part 526.

(2) Accounts evidenced by noticeaccount books. A savings account which is evidenced by a notice-account book containing a requirement that the holder of the account give the Federal association written notice of at least 90 days prior to making any withdrawal from such account, except as otherwise provided in this subparagraph (2), may receive earnings at a rate higher than the regular rate but not in excess of the applicable maximum rate of return prescribed for notice accounts in Part 526 of this chapter. A Federal association may provide that such notice prior to withdrawal will not be required at the end of a dividend period or within 10 days thereafter in connection with the withdrawal of funds which have remained in such account for at least 90 days. In the event of any other withdrawal from such account prior to the expiration of such notice period, the holder of such account

shall not be entitled to receive accrued and unpaid earnings on the amount withdrawn for the period of time such funds remained in the association since the last date on which the association regularly distributed earnings on notice accounts.

(3) Accounts evidenced by certificates. (j) A savings account of less than $100,000 ($50,000, if the association's home office is located in Puerto Rico) which is evidenced by a certificate meeting the requirements of paragraph (c) of this section may receive earnings at a rate higher than the regular rate, but not in excess of the applicable maximum rate of return prescribed for certificate accounts in Part 526 of this chapter, if such account is maintained at not less than the minimum amount required by such Part for such rate of return, and for such continuous period of not less than 90 days (30 days for a public unit account), nor more than 10 years, commencing on the date of such certificate, as the association may determine. (ii) A savings account of $100,000 ($50,000, if the association's home office is located in Puerto Rico) or more which is evidenced by a certificate meeting the requirements of paragraph (c) of this section may receive earnings at a rate higher than the regular rate, but not in excess of the applicable maximum rate of return prescribed for certificate accounts in Part 526 of this chapter, if such account is maintained at not less than such minimum amount, for such continuous period of not less than 30 days, nor more than 10 years, commencing on the date of such certificate, as the association may determine. (iii) Any savings account issued pursuant to this section may be evidenced by more than one certificate.

(4) Split rates-(1) General. For any distribution period for which the regular rate is less than the applicable maximum rate of return prescribed for regular accounts in Part 526 of this chapter, a savings account which is evidenced by a certificate meeting the requirements set forth in subdivision (ii) of this subparagraph may receive earnings at a rate higher than the regular rate on the balance of any account in excess of such minimum balance as shall be fixed by the board of directors, which minimum balance shall not be less than $200, and at a rate or rates in excess of such higher rate on such higher balance or balances as the board of directors may prescribe,