Truth in Savings Disclosure

This disclosure describes the interest payable on and fees charged with respect to Deposit Accounts opened through the Bank of Internet USA Website. The Truth in Savings Disclosure information that describes the services, fees and interest paid for each type of account is located in the Schedule of Deposit Account Fees and Terms. That document is incorporated into, and an integral part of this disclosure. The Schedule of Deposit Account Fees and Terms is available on our Internet Website or, if requested, in writing.

Checking Accounts. Our Checking Accounts allow you unlimited deposits, unlimited check writing, electronic bill payments, check (debit) card purchases and ATM withdrawals. We offer three types of Accounts: non interest bearing, regular interest bearing and tiered interest bearing [method A or B]. Interest earned on our Tiered Interest Checking Accounts depends on the balance you keep in the account. Please see our Schedule of Interest Rates on our Website for the current interest rates and annual percentage yield. Separate pages with the rates and yields are included with the Banking Documents. We use the daily balance method to calculate the interest on your account. This method applies a daily periodic rate for the tier your daily balance falls into each day. Interest begins to accrue on the business day you deposit non-cash items (for example, checks). Interest is compounded daily and credited monthly. The Annual Percentage Rates and Annual Percentage Yields and Tiering Methods can be found in the Schedule of Deposit Account Fees and Terms on our Internet Website, www.bankofinternet.com, or the Banking Documents.

We may change the interest rate and the annual percentage yield at the banks discretion. We do not charge a fee to obtain a Debit Card, but you may have to qualify for it. We do not charge you a fee for ATM withdrawals or balance inquiries at any ATM, or for purchases made from your Checking Account at merchant locations with your Card. However, another financial institution may impose fees for ATM transactions. We will reimburse your account up to the amount stipulated by your account type per month for third-party ATM charges that you incur during that month.

Fees applicable to our Checking Account are as set forth in the Schedule of Deposit Account Fees and Terms, which is available on our Internet Website or, if requested, in writing. All service fees will be posted to the Checking Account at month end.

Savings Accounts. Unlimited deposits may be made to Savings Accounts. Unlimited withdrawals or inter-account transfers may be made from the collected balance in this account when made in person, by mail, by messenger, Internet or by automatic teller machine (ATM). Our current interest rate and the corresponding Annual Percentage Yield are shown on our Website and in the Banking Documents. Interest is compounded daily and credited monthly. The interest rate and Annual Percentage Yield can also be found in the Schedule of Deposit Account Fees and Terms, which is available in written form upon request.

We may change the interest rate and the annual percentage yield at any time. We use the daily balance method to calculate the interest on your account. This method applies a daily periodic rate to the principal in the account each day. Interest begins to accrue on the business day you deposit non-cash items (for example, checks). If you close your Savings Account before interest is credited, you will receive the accrued interest to the date of withdrawal.

We do not charge you a fee for ATM withdrawals or balance inquiries at any ATM. However, another financial institution may impose fees for ATM transactions. Fees applicable to our Savings Account are as set forth in the Schedule of Deposit Account Fees and Terms, which is available on our Website or, if requested, in writing. All service fees will be posted to the Savings Account at the end of the monthly cycle.

Certificate of Deposit Accounts. When you open a Certificate of Deposit Account, you agree to keep your funds in the account until the maturity date. You must deposit at least $1,000.00 to open a Certificate of Deposit Account. Interest rates on Certificate of Deposit Accounts will vary based on the term requested. Terms for Certificates of Deposit are offered in monthly increments up to five years. The interest rate and annual percentage yield on the Certificate of Deposit Account is determined on the day we receive your application. This rate is reserved for a period of 10 calendar days to allow time for your deposit to arrive. Our current interest rates and annual percentage yields for time deposits as of today can be found at our Website, www.bankofinternet.com, or in our offices. The annual percentage yield assumes that interest remains on deposit until maturity. A withdrawal of interest will reduce earnings. You must maintain the entire balance in the account until maturity to obtain the disclosed annual percentage yield.

We use the daily balance method to calculate the interest on a Certificate of Deposit Account. This method applies a daily periodic rate to the principal in the account each day. Interest begins to accrue on the business day you deposit non-cash items (for example, checks). Interest is compounded daily and credited to your account monthly, as you designated at the time of your account application. No additional deposits will be allowed to the Certificate of Deposit Account before the maturity date.

Early Redemption Fees. Withdrawals from Certificate of Deposit Accounts without penalty will only be allowed at maturity. On a Certificate of Deposit account we will impose a fee if you withdraw any or all of the principal before the maturity date. The fee imposed will be determined by the following schedule based on the number of days in the stated term:

• CD term of 3 thru 5 months, one and a half month loss of interest, accrued or not;
• CD term of 6 thru 11 months, three months loss of interest, accrued or not;
• CD term of 12 thru 23 months, six months loss of interest, accrued or not;
• CD term of 24 thru 35 months, twelve months loss of interest, accrued or not;
• CD term of 36 thru 47 months, eighteen months loss of interest, accrued or not;
• CD term of 48 months or greater, twenty four months loss of interest, accrued or not

Interest forfeited applies only to the principal amount withdrawn prior to the maturity date. The above schedule applies to personal CD accounts only. A different schedule applies to business CD accounts.

Maturity Options. Personal Certificate of Deposit Accounts automatically renew for the same term and at the current interest rate then paid for the term in which the Account was renewed. If the Certificate of Deposit Account automatically renews, you have 10 days from the maturity date to make additional deposits or withdraw funds without penalty. Interest earned during one term that is not withdrawn during or within the ten day grace period immediately after that term is added to principal for the renewal term.

If you close the Certificate of Deposit during the grace period, you will forfeit any interest accrued since the maturity date.

The interest rate and annual percentage yield for each renewal term of a Certificate of Deposit Account will be determined by us on or before the maturity date. The current interest rates are always available on our Website. You may also email or call us on the maturity date and we can tell you what the interest rate will be for the next renewal term.

Money Market Savings Accounts. Unlimited deposits may be made to a Money Market Savings Account. Unlimited withdrawals or inter-account transfers may be made from the collected balance in this account when made in person, by mail, by messenger, Internet or by automatic teller machine (ATM). Not more than 6 pre-authorized, automatic or telephone transfers may be made during a statement cycle, three of which can be checks or point of sale (POS) transactions (combination of both checks and POS transactions may not exceed 3). Withdrawals made over the stated withdrawal limitations will be assessed an excessive transaction fee per withdrawal.

Please see our Schedule of Interest Rates on our Website for the current interest rates and annual percentage yields. A separate page with the rates and yields are included with the Banking Documents. We use the daily balance method to calculate the interest on your account. This method applies a daily periodic rate for the tier your daily balance falls into the principal in the account each day. Interest begins to accrue on the business day you deposit non-cash items (for example, checks). Interest is compounded daily and credited monthly. We may change the interest rate from time to time, at our discretion.

Fees. Fees applicable to our Deposit Accounts are as set forth in the Schedule of Deposit Account Fees and Terms at our Internet Website, www.bankofinternet.com and in the Banking Documents.