Article 11. Interest of California Financial Code >> Division 2. >> Chapter 5. >> Article 11.

An association may issue savings accounts earning interest at different rates of return. The annual rate of return paid on a savings account may either be fixed at the time the account is issued or may vary on any basis specified at the time the account is accepted.

An association may classify its savings accounts on any basis including, but not limited to, character, amount, or duration of the account, regularity of additions, or location of origin of the account.

Except for accounts that are classified according to a specified contractual time or notice period, interest shall be based on the withdrawal value of each savings account at the beginning of the accounting period, plus additions made during the period (less amounts previously withdrawn and noticed for withdrawal, which for interest purposes shall be deducted from the latest previous additions) computed at the rate for the time the funds have been invested, determined as provided in Section 7053.

(a) The date of investment in a savings account shall be the date of actual receipt by the association of the account or an addition to the account, except that if the association shall so determine, accounts in one or more classifications or additions received by the association on or before a date not later than the 20th day of the month (unless the day determined is not a business day, in which case it may be the next succeeding business day) shall receive interest as if invested on the first day of the month in which the payments were received.
  (b) If the association makes a determination under subdivision (a) it also shall determine that payments received subsequent to that determination date shall either receive interest as if invested on the first day of the next succeeding month, or receive interest from the date of actual receipt by the association, except as provided by Section 866.3.

The board of directors, by resolution, may determine any of the following:
  (a) That interest shall not be paid on designated types of savings accounts from which withdrawals may be made upon demand or by negotiable and transferable order or authorization.
  (b) That an association may establish minimum balance requirements for savings accounts to be eligible for distribution of interest.
  (c) That, subject to applicable maximum regulatory limitations, an association may pay interest on a savings account at a rate or anticipated rate of return determined at the time that the account is accepted.

The directors shall determine the method of calculating the amount of any interest on any savings account classification as provided in this article and the time or times when the interest is to be paid or credited.