NZ CFS L5 Core Practice Questions - NZ Certificate In Financial Services (Level 5) - Core Financial Advice Exam

Which of the following is correct regarding early withdrawal from a term deposit in New Zealand?

Customers can withdraw any amount instantly without notice or penalty. Banks usually require a notice period (e.g., 31 days) and apply an interest rate reduction or penalty. Interest already accrued is forfeited entirely, and a flat fine is charged by the regulator. Early withdrawal is illegal under the Reserve Bank of New Zealand regulations.

Correct Answer:

Banks usually require a notice period (e.g., 31 days) and apply an interest rate reduction or penalty.

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