Truth in Savings Act (TISA)
What Is the Truth in Savings Act (TISA)?
Truth in Savings Act (TISA) is a U.S. federal law designed to promote transparency in how banks and credit unions disclose information about deposit accounts.
The law was enacted in 1991 as part of the Federal Deposit Insurance Corporation Improvement Act to help consumers better understand the terms and costs associated with savings accounts, checking accounts, and other deposit products.
TISA requires financial institutions to clearly disclose important account information, including:
- Interest rates
- Annual Percentage Yield (APY)
- Fees associated with the account
- Minimum balance requirements
- How interest is calculated
The goal is to allow consumers to compare financial products more easily.
Why It Matters
Truth in Savings Act improves transparency in consumer banking.
Before these disclosure requirements, banks could advertise interest rates or account benefits in ways that made it difficult for consumers to compare accounts.
TISA helps consumers:
- Compare savings accounts and checking accounts
- Understand fees and balance requirements
- Evaluate the real return on deposit accounts
The law also supports fair competition among financial institutions.
How Truth in Savings Act (TISA) Works
Truth in Savings Act requires banks and credit unions to provide standardized disclosures when offering deposit accounts.
Example: When opening a savings account, a bank must disclose the Annual Percentage Yield (APY), minimum balance requirements, and any fees associated with the account.
These disclosures must be provided before the account is opened and must follow standardized calculation methods.
Financial institutions must also provide periodic account statements showing interest earned and fees charged.
Truth in Savings Act vs Truth in Lending Act
Truth in Savings Act → Applies to deposit accounts and savings products
Truth in Lending Act → Applies to credit products such as loans and credit cards
Both laws promote transparency in financial services.
Related Terms
