Category: 

What Is a Note Notice?

Article Details
  • Written By: Malcolm Tatum
  • Edited By: Bronwyn Harris
  • Last Modified Date: 23 November 2016
  • Copyright Protected:
    2003-2016
    Conjecture Corporation
  • Print this Article
Free Widgets for your Site/Blog
Although they mainly functioned as downspouts, gargoyles were also intended to scare people into attending church.  more...

December 3 ,  1989 :  The Cold War officially ended.  more...

A note notice is a type of notification that a financial institution sends to a client indicating that a financial security or note has reached its maturity date and is available for cashing in or rolling into some other investment opportunity. While the particulars of the notice will vary based on local custom and any governmental regulations that may apply, data such as the name of the security or note along with the amount due and the maturity date will be included. Information regarding how long the recipient has to respond is also often part of the detail found in a note notice.

One of the more common examples of a note notice is the formal notification that a bank will send to a customer when his or her certificate of deposit or CD is nearing maturity. The notice will often provide a breakdown of the principal and the interest accrued as of the maturity date. The client can use that data to notify the bank of the intention to renew the CD, roll the principal and interest into another investment account, or to cash in the CD.

Ad

Most institutions that make use of the note notice to alert customers to the upcoming maturity of a security have specific guidelines for the notification. This will include the format for the document as well as an outline of the information that is provided within the body of the notice. Most institutions will attempt to prepare and send the note notice by post at least ten business days prior to the maturity date. This provides the recipient with time to consider the various options for using the balance of the note for reinvestment or even diverting the balance into a checking account.

In many nations, banking laws allow the institution to take specific action with the security should the investor fail to take some action on or near the maturity date. This action is often noted in the text of the note notice so the recipient is aware of what is likely to happen if he or she does not take some action within the allowed time frame. For example, if the note in question is a certificate of deposit and the customer has not indicated what he or she wishes to do with the balance by a certain date, the bank may simply renew the CD for a specified period of time, or cash in the CD and deposit the balance in the customer’s checking or savings account.

Ad

You might also Like

Recommended

Discuss this Article

Post your comments

Post Anonymously

Login

username
password
forgot password?

Register

username
password
confirm
email