We believe an outdoor advertisement that states a rate of return must use the full term “annual percentage yield” at least once. Also, outdoor advertisements must disclose the APY and may (but are not required to) include the interest rate.

Regulation DD generally requires advertisements that include a rate of return to “state the rate as an ‘annual percentage yield’ using that term.” “[T]he abbreviation ‘APY’ may be used provided the term ‘annual percentage yield’ is stated at least once in the advertisement.” An advertisement “shall not state any other rate, except that the ‘interest rate,’ using that term, may be stated in conjunction with, but not more conspicuously than, the annual percentage yield to which it relates.” While there are several exceptions to Regulation DD’s advertising requirements for outdoor signs, these exceptions do not extend to the requirement to disclose the advertised product’s “annual percentage yield,” using that term.

Because your outdoor advertisement will state an interest rate for the CDs, we believe you must disclose the APY and use the full term “annual percentage yield” at least once. You also may include the interest rate on the advertisement if you wish, provided that the disclosure complies with Section 1030.8(b).

For resources related to our guidance, please see:

• Regulation DD, 12 CFR 1030.8(e)(1) (“If an advertisement is made through one of the following media, it need not contain the information in paragraphs (c)(1), (c)(2), (c)(4), (c)(5), (c)(6)(ii), (d)(4), and (d)(5) of this section: . . . (ii) Outdoor media, such as billboards.”)

• Regulation DD, 12 CFR 1030.8(b) (“If an advertisement states a rate of return, it shall state the rate as an ‘annual percentage yield’ using that term. (The abbreviation ‘APY’ may be used provided the term ‘annual percentage yield’ is stated at least once in the advertisement.) The advertisement shall not state any other rate, except that the ‘interest rate,’ using that term, may be stated in conjunction with, but not more conspicuously than, the annual percentage yield to which it relates.”)

• Regulation DD, 12 CFR 1030.2(c) (“Annual percentage yield means a percentage rate reflecting the total amount of interest paid on an account, based on the interest rate and the frequency of compounding for a 365-day period and calculated according to the rules in appendix A of this part.”)

• Regulation DD, 12 CFR 1030.2(o) (“Interest rate means the annual rate of interest paid on an account which does not reflect compounding. For the purposes of the account disclosures in § 1030.4(b)(1)(i) of this part, the interest rate may, but need not, be referred to as the ‘annual percentage rate’ in addition to being referred to as the ‘interest rate.’”)