Notice: Function _load_textdomain_just_in_time was called incorrectly. Translation loading for the wp-migrate-db domain was triggered too early. This is usually an indicator for some code in the plugin or theme running too early. Translations should be loaded at the init action or later. Please see Debugging in WordPress for more information. (This message was added in version 6.7.0.) in /srv/app/gotoiba-dev/htdocs/web/wp-includes/functions.php on line 6121
We are thinking of offering a $100 for customers opening a checking account. I know we can’t pay interest on a checking account, so how can other banks offer this? – IBA Compliance Connection

We are thinking of offering a $100 for customers opening a checking account. I know we can’t pay interest on a checking account, so how can other banks offer this?

by

A bank is permitted to offer a $100 to customers opening a new checking account if the $100 premium is not related to the balance in the demand deposit account or the duration of the account balance. As a general rule, a bank is prohibited from paying interest on a demand deposit account under the Federal Deposit Insurance Corporation regulations, but the regulations contain some exceptions to the definition of “interest.” Payment of any premium that is not directly or indirectly related to the balance in a demand deposit account or the duration of the account balance is not deemed to be an “interest” payment under the regulation. 12 CFR 330.101(e).

Another exception from the definition of “interest” are premiums given to the depositor only at the time a new account is opened or an addition is made to an existing account. Under this exception no more than two premiums per deposit can be given during any twelve-month period and the value of the premium cannot exceed $10 for a deposit of less than $5,000, or $20 for a deposit of $5,000 or more. In determining the amount of a merchandise premium the bank must include shipping, warehousing, packaging and handling costs. 12 CFR 330.101(a).