What must be disclosed if there is an early withdrawal penalty for time accounts?

The correct choice is that the disclosure must indicate that an early withdrawal penalty may be imposed. According to the Truth in Savings Act, financial institutions are required to provide clear information about the terms of time accounts, which include the possibility of penalties for early withdrawal. It is crucial for consumers to understand that withdrawing funds before maturity can result in a financial penalty, ensuring transparency and allowing them to make informed decisions regarding their account options.

While the specific penalty amount could be relevant, simply stating that a penalty may be imposed is enough to inform the consumer about the potential consequences of early withdrawal. Providing clear guidance about the existence of such penalties supports the consumer’s understanding of their account terms. Other options, like detailing the exact penalty amount or the reasons behind it, while useful, are not minimally required disclosures under TISA, making the acknowledgment of the possibility of a penalty the most fundamental information that must be communicated.