Can a bank in Wisconsin impose a penalty for cashing out a CD with a POD provision early if the initial depositor has passed away?
We are not familiar with Wisconsin state law, which might impose a restriction on a bank's ability to assess such a penalty. Federal regulations permit a bank to waive the minimum early withdrawal penalty required if a CD is withdrawn within the first six days after deposit. However, there is no requirement that the bank do so, or that the bank waive any penalty called for in the deposit contract in the event of an owner's death.
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We are not familiar with Wisconsin state law, which might impose a restriction on a bank's ability to assess such a penalty. Federal regulations permit a bank to waive the minimum early withdrawal penalty required if a CD is withdrawn within the first six days after deposit. However, there is no requirement that the bank do so, or that the bank waive any penalty called for in the deposit contract in the event of an owner's death.