2025 Session Last amended: 1995 session

§ 334.012 — Rates of Interest; Loans Secured by Savings Accounts

Plain-Language Summary

When you borrow money using your own savings account as collateral, a Minnesota bank can charge interest at up to 2% above what the savings account earns, or the standard contracted rate, whichever is higher.

334.012 RATES OF INTEREST; LOANS SECURED BY SAVINGS ACCOUNTS.

Notwithstanding the provisions of section 334.01, a financial institution may, in the case of a loan or forbearance of money, goods, or things in action, secured by a savings or time deposit account owned by the borrower, charge interest at a rate of not more than the greater of two percent in excess of the rate of interest payable on the savings or time deposit account or the contracted rate authorized in section 334.01, subdivision 1. For purposes of this section, “financial institution” means a bank, savings bank, trust company, mutual savings bank, or savings association organized under the laws of this state or the United States and having its main office in this state.

History:

1978 c 643 s 1; 1995 c 202 art 1 s 25

History: History: 1978 c 643 s 1; 1995 c 202 art 1 s 25

Practical Notes

Savings-secured loans are typically low-risk for the bank since the loan is backed by cash in the borrower’s own account. This law allows the bank to charge a modest spread above the savings rate. It applies only to banks, savings banks, trust companies, and savings associations with their main office in Minnesota.

Source: Minnesota Office of the Revisor of Statutes