What conditions must be disclosed for any penalties on early withdrawals?

The correct answer highlights the requirement under the Truth in Savings Act (TISA) that financial institutions must provide clear information about how penalties on early withdrawals are assessed and calculated. This disclosure ensures transparency for consumers, allowing them to understand the financial implications of withdrawing funds before the end of a specified term for accounts such as time deposits (CDs).

By detailing the assessment and calculation of penalties, institutions help consumers make informed decisions, compare offers from different banks, and understand the risks involved in early withdrawal. This requirement aligns with TISA’s overall aim of promoting informed consumer choice and preventing misleading or deceptive practices regarding savings accounts.

In contrast, the other options do not capture the essence of TISA's disclosure requirements. For example, suggesting that penalties are unlimited does not reflect the nature of TISA, which emphasizes clear and accurate disclosures rather than unfettered penalties. Indicating that only the amount of penalties is required fails to encompass the need for clarity on how those penalties are imposed, making it less comprehensive. Lastly, the claim that no penalties need to be disclosed runs contrary to TISA's intent to ensure consumers are adequately informed about their financial products.