[Code of Federal Regulations]
[Title 12, Volume 6]
[Revised as of January 1, 2001]
From the U.S. Government Printing Office via GPO Access
[CITE: 12CFR707.7]

[Page 383]
 
                       TITLE 12--BANKS AND BANKING
 
            CHAPTER VII--NATIONAL CREDIT UNION ADMINISTRATION
 
PART 707--TRUTH IN SAVINGS--Table of Contents
 
Sec. 707.7  Payment of dividends.

    (a) Permissible methods--(1) Balance on which dividends are 
calculated. Credit unions shall calculate dividends on the full amount 
of principal in an account for each day by use of either the daily 
balance method or the average daily balance method. Credit unions shall 
calculate dividends by use of a daily rate of at least \1/365\ of the 
dividend rate. In a leap year a daily rate of \1/366\ of the dividend 
rate may be used.
    (2) Determination of minimum balance to earn dividends. A credit 
union shall use the same method to determine any minimum balance 
required to earn dividends as it uses to determine the balance on which 
dividends are calculated. A credit union may use an additional method 
that is unequivocally beneficial to the member.
    (b) Compounding and crediting policies. This section does not 
require credit unions to compound or credit dividends at any particular 
frequency.
    (c) Date dividends begin to accrue. Dividends shall begin to accrue 
not later than the day specified in section 606 of the Expedited Funds 
Availability Act (12 U.S.C. 4005) and implementing Regulation CC (12 CFR 
part 229). Dividends shall accrue on funds until the day funds are 
withdrawn.

(Approved by the Office of Management and Budget under control number 
3133-0134)

[58 FR 50445, Sept. 27, 1993, as amended at 61 FR 114, Jan. 3, 1996]