We may impose a penalty if you withdraw funds from your account before the maturity date. a) Amount of Penalty: For all accounts, the amount of the early withdrawal penalty is based on the term of your account. The penalty schedule is as follows: Terms of less than 1 year: half the term's dividends Terms of 1 to 2 years: 180 days’ dividends Terms of 3 year or greater: 360 days’ dividends b) How the Penalty Works: The penalty is calculated as a forfeiture of part of the dividends that have been or would be earned on the account. It applies whether or not the dividends have been earned. In other words, if the account has not yet earned enough dividends or if the dividends have already been paid, the penalty will be deducted from the principal. c) Exceptions to Early Withdrawal Penalties: At our option, we may pay the account before maturity without imposing an early withdrawal penalty under the following circumstances: (i) When an account owner dies or is determined legally incompetent by a court or other body of competent jurisdiction. (ii) Where the account is an Individual Retirement Account (IRA) and any portion is paid within seven (7) days after the establishment of the account; or where the account is a Keogh Plan (Keogh), provided that the depositor forfeits an amount at least equal to the simple dividends earned in the amount withdrawn; or where the account is an IRA or Keogh and the owner attains age 59½ or becomes disabled.