Consumer Deposit Account Disclosure

Consumer Deposit Account Agreement

“You” and “your” refer to anyone who signs the signature card for any deposit account. These terms also refer to any person or entity on whose behalf the account is opened. “We”, “us”, and “our” refer to Naugatuck Savings Bank. “Check” means a check or other noncash item we handle for payment, other than an electronic fund transfer or wire transfer.

I. General Rules for All Deposit Accounts

I.1 Your Agreement

You agree to the terms of this agreement for each deposit account that you maintain with us. This includes the terms in our Consumer Deposit Account Disclosures, Rate Sheet(s) and Consumer Schedule of Charges that are made part of this agreement. You also agree that you and we have all rights given by law.

I.2 Authorized Signatures

For purposes of withdrawal and other account matters, unless we specifically agree otherwise in writing, we can honor any request or order signed by any person whose signature appears on the signature card for the account. We may supply endorsements as allowed by law on checks.

I.3 Collection of Checks

When you deposit a check to your account we collect the money from the bank or other party obligated to pay it. We act as your agent to do this. Except to the extent otherwise required by law, we are not responsible for losses that happen during collection of a check that are not caused by our own negligence.

When you cash or deposit a check, we may require that funds equal to the amount of the check remain in your account or another account you have with us until the funds from that check become “available for withdrawal.” If we receive a check you have written on your account in an amount greater than the funds “available for withdrawal” (See our Expedited Funds Availability Policy) from your account, we have the right not to pay that check.

If we credit your account or allow you to withdraw the amount of a deposited check and it is returned to us unpaid or we receive a notice of non-payment of the check, we have the right to take that amount from your account or to obtain a refund by any method we deem proper, including the exercise of our right of set-off (see Section I.8). If the amount of available funds in your account is less than the amount of the check, you are required to pay us the balance.

There are certain checks that we may not cash or accept for deposit. These include checks drawn on banks in foreign countries. We may agree to try to collect the money for you from the bank on which the check is drawn. If we succeed, we will then deposit the money we collect into your account. We reserve the right to charge you for this service.

I.4 Charges

(a) General. You agree to pay the charges listed on our Schedule of Charges. We can change these charges or add new ones upon giving any notice that may be required under Section I.6 below. We may take these charges from your account.

(b) Minimum Balance to Waive or Reduce Charges. For certain accounts, we may waive or reduce certain account charges if you maintain a specific minimum balance. The minimum balance rules for waiving or reducing charges for all deposit accounts are described in the Schedule of Charges.

I.5 Joint Accounts

(a) Joint Accounts with Right of Survivorship. If this is an account in the names of two or more individuals, unless we specifically agree otherwise in writing, it will be a joint account with right of survivorship as defined in Section 36a-290 of the Connecticut General Statutes or the successor to that statute. This means that each of you is making this agreement with each other and with us. Each of you agrees that all monies deposited by any of you, as well as any interest earned or bonus payments earned, can be paid to any one or more of you while you are alive. After the death of any one or more of you, we can pay any money in the account to any one or more of you who is then alive. Each of you gives to all of the others authority to deposit to the account any check payable to any one or more of you. For certain checks, such as a check payable by the government, we may require all persons to whom the check is payable to endorse the check for deposit.

If we honor a check that was signed by any one or more of you, and this causes an overdraft, each of you is liable for the overdraft, whether or not you signed the check or benefited from its proceeds.

(b) Joint Accounts without Survivorship. If this is an account in the name of two or more individuals without survivorship, we will require the authorization of all of the owners for purposes of withdrawal and other account matters. On the death or incompetence of one or more of the owners, that owner’s interest in the account passes to that owner’s estate and the signature of that owner’s personal representative will be required for the withdrawal of funds and other account matters.

(c) Limitation on Number of Owners. We have the right to limit the number of owners on any account.

I.6 Amendments

(a) Interest Rate. (i) Certificates of Deposit (CDs). The interest rate (and the resulting annual percentage yield) payable on any CDs, other than Variable Rate IRA CDs, will be the rate(s) established at the opening of the account for the term of that account.

(ii) Variable Rate Accounts. All other accounts are variable rate accounts. This means that your interest rate and annual percentage yield may change. For accounts other than Variable Rate IRA CDs, we may change the simple interest rate(s) and resulting annual percentage yield on an account at our discretion at any time without prior notice to you. The interest rate on Variable Rate IRA CDs may change monthly and will be based on the Average Auction Rate for U.S. Treasury Bills for the preceding month plus .25 percentage points.

(b) Other Amendments. We can make other amendments to this agreement by posting written notice in our lobbies or by delivery to you of a copy of the amendment(s). Federal and state law and regulations require that we give you notice of most additional or increased charges and certain other changes to the terms of an account which may be adverse to you before those amendments can become effective.

I.7 Waiver of Your Rights to “Notice of Dishonor” and “Presentment.”

If another institution refuses to pay a check (called “dishonor”) which you deposited or cashed, we may put the check through for collection again. We will not always give you notice that the check was dishonored before putting the check through for collection again. This means that in this instance you are “waiving” your right to “notice of dishonor.”

In the process of collecting a check that you have deposited to your account, you agree that we may delay putting the check through for collection. This means that you are “waiving” your right to have us begin the process of “presenting” the check by the next banking day.

I.8 Right of Set-Off

Unless this right is denied to us by law, we can take any funds in your account to pay any debt you owe us that is in default (including unpaid charges). This is called the right of set-off and applies to all funds of yours in our possession now or in the future in any account you maintain with us. We can use this right of set-off without going through any legal process or court proceedings. If this is a joint account, this right of set-off applies to our use of deposits of any of you to pay the debts owed to us by any one or more of you individually or with others. If we exercise this right by taking what you owe us from a Certificate of Deposit account, such payment shall be deemed an early withdrawal, and an early withdrawal penalty may be imposed.

I.9 Collection Fees

If in the course of collecting any money you may owe us we incur expenses or fees, we may take those from your account, including attorneys’ fees unless prohibited because suit was not instituted. If there are not sufficient available funds in your account to cover these expenses or fees, the unpaid balance of such fees or expenses are your responsibility.

I.10 Identification

We can require proper identification for check cashing and any account transactions.

I.11 Social Security Number Required

If you fail to give us a correct Social Security or taxpayer identification number for the account, we can refuse to open an account or close your account or require you to apply for a taxpayer identification number. When allowed by law, we can also take from your account any charges imposed by the Internal Revenue Service (IRS) which result from your failure to provide us with the proper taxpayer identification number.

We may also be required by federal law to withhold part of any interest you earn and pay it to the IRS. When we do this, the amount we withhold will be reported to you and the IRS annually and applied by the IRS to the payment of any federal income tax you owe for that year.

I.12 Our Right to Close or Limit Accounts

We reserve our right to stop offering any particular type of account and to close your account at any time. We will mail you a check for the amount of available funds on deposit as soon as is reasonable. We reserve the right to decline to open an account for any person. If we decline to open an account based on information we receive from a credit reporting agency, we will provide you with a notice detailing the reason for our denial and the name, address and phone number of the agency that provided the information. We have the right to limit the number of accounts owned by any depositor(s).

I.13 Enforcement of Our Rights

We can choose not to enforce or to delay in enforcing any of our rights under this agreement without losing them in the future.

I.14 Address

You must inform us immediately, in writing, of any change in your mailing or email address. Unless you do so, we may continue to mail statements and other notices to your address as it appears on our records.

I.15 Statements, Errors, Alterations, Forgeries

You must examine and balance your periodic statements as soon as you receive them. If you do not let us know of any mistakes within thirty (30) days after you receive a statement, we may consider the checks paid and withdrawals made during that statement cycle to be genuine. We may also consider the statement to be correct, except as provided in our Electronic Fund Transfer Agreement that gives you sixty (60) days to report an error concerning an electronic fund transfer. We will not be liable to you for payment of any forged or altered check or unauthorized withdrawal if you fail to notify us of the forgery or alteration within that thirty (30) day period and your failure causes us to suffer a loss. We will not be liable for forged or altered checks or unauthorized withdrawals if the forgery or alteration resulted from your negligence. You may have to bear losses that could have been prevented if you had discovered and told us within the thirty (30) day period of errors or unauthorized transactions.

I.16 Use of Our Checks and Forms

(a) Checks. We can require that you use only checks we have approved for account use. The only checks we have given our prior approval to are the ones offered to you through us by our approved vendor. If you use a check we have not approved we can manually process the nonconforming check and charge you the fees listed, if any, in our Schedule of Charges.

(b) Forms. We can also require that you use our forms for making deposits, withdrawals and any other account activities.

I.17 Not Transferable

Your deposit account is not transferable to anyone unless we agree in writing. You may not voluntarily transfer or pledge your account without our consent. This does not affect a transfer occurring by operation of law, such as that which would occur on death, bankruptcy or as a result of a court order.

I.18 Stop Payment Orders

If you request us to stop payment on a check, you will be charged the stop payment fee listed on our Schedule of Charges and we will make a good faith effort to do so. The stop payment order must describe the check with reasonable certainty (must include date, check number, amount of check and payee). If the stop payment order does not do so or if we do not have a reasonable opportunity to act on it, we will not be liable if we fail to stop payment, or if our payment of the check (or checks) causes other checks to be returned for insufficient funds. If we do stop payment of a check at your direction, you agree to pay all costs we may incur as a result. An oral or written stop payment order is good for 180 days unless we receive written notice to remove it or renew it before the 180-day period expires.

I.19 Receipt of Funds Transfer

A “funds transfer” is a transfer of funds to your account which is not initiated by a check, draft, or similar paper instrument issued by you, but by a payment order directed to the institution holding the payor’s funds. Most funds transfers, including regularly recurring transfers such as direct deposit of Social Security payments or wages, are governed by our Electronic Fund Transfer (“EFT”) Disclosure. Some, like wire transfers and drafts are not. If we receive a “funds transfer” to your account that is not governed by our EFT Disclosure, we may, in our discretion, refuse to accept it, if it is a “funds transfer” we are not required by law to accept. If we accept a “funds transfer” not governed by our EFT Disclosure, we may, in our discretion, send notice by first class mail to your address as it appears on our records, but we do not agree to send notice (other than your periodic statement) if you get a statement for that account.

I.20 Postdated Checks

If the date written on a check is later than the date the check was issued, the check is called “postdated.” We will not look to see if a check is postdated when we determine whether or not to pay the check. We have the right to charge against your account any payment we make on a postdated check before the date on the check, unless you have given us notice of the postdated check. The notice must describe the check with reasonable certainty (must include date, check number, amount of check and payee). If the notice does not do so, or if we do not have a reasonable opportunity to act on the notice, we will not be liable if we pay the check before the date on the check or if such payment causes other checks to be returned for insufficient funds. A notice of a postdated check will never be good beyond the date on the check. An oral or written notice of a postdated check is good for no longer than 180 days unless we receive written notice to remove or renew it before the 180-day period expires. If you request that we do not pay a postdated check prior to the date of the check, we may charge you the fees listed, if any, in our Schedule of Charges.

I.21 Stale Dated Checks

We may, at our option, pay a check that is over six months old, but we are not required to do so.

I.22 Overcredited Account

If we credit your account for an amount in excess of the checks or funds actually received for deposit, we may take the excess from your account without prior notice to you.

I.23 Change in Ownership

If you wish to add an owner to, delete an owner from, or otherwise change the ownership of an account, we may require you to close the account, to surrender any passbook or similar account documents, and to open a new account listing the new owners. If the account is a Certificate of Deposit, we may require you to pay any applicable early withdrawal penalty when you close the account.

I.24 Service of Process

If we receive a court order, levy, garnishment, execution or other similar legal process (all of which we call “legal process”) concerning the funds in your account, we may place a “hold” on the funds in your account, for the amount stated in the legal process. We may also place a “hold” on the funds in your account if we reasonably believe we may sustain a loss pending the resolution of any dispute, claim, or investigation concerning your account. Funds held may be removed from your account and held in escrow until the matter is resolved. A “hold” means you cannot withdraw funds and we will not pay checks out of the funds subject to the “hold.” We may also surrender the funds in your account as required by any legal process. We will not be liable if these actions cause checks to be returned for insufficient funds.

I.25 Endorsements

You agree that all endorsements on any check you deposit to your account will be made in the area designated for endorsements on the reverse side of the check. You agree that you are liable for any loss resulting from a failure to comply with this requirement.

I.26 Payment of Checks

We will pay checks drawn on your account that are presented for payment on a banking day in order from the smallest amount to the largest amount. This order of payment is designed to provide for the processing of checks in an orderly manner. If there are not available funds in the account to pay all of the checks and other charges against the account (such as ATM withdrawals, bank fees, preauthorized transfers and other electronic debits from account), you will have to pay an overdraft fee. A fee is charged for each item presented against non-sufficient funds whether we choose to pay the item or not. We will determine in our sole discretion whether to pay an item presented for payment if the account does not contain sufficient available funds. Whether we pay or do not pay an item for which there are insufficient funds, we will send you a notice disclosing the overdraft amount and the fees associated with the overdraft. The overdraft and uncollected item charges are listed in the Schedule of Charges.

I.27 Sub-Accounts

All checking accounts consist of a checking sub-account and a savings sub-account. The Bank may periodically transfer funds between these two sub-accounts. If your account is an interest-bearing account, your interest calculation will remain the same. Otherwise, the savings sub-account will be noninterest­bearing. The savings subaccount will be governed by the rules governing our other savings accounts. This process will not affect your available balance, the interest you may earn, FDIC Insurance protection, or your monthly statement.

I.28 USA PATRIOT Act

Important information about procedures for opening a new account. To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify, and record information that identifies each person who opens an account.

What this means for you:

• When you open an account, we will ask for your name, address, date of birth, and other information that will allow us to identify you
• We may also ask to see your driver's license or other identifying documents

II. Rules Which Apply to Savings Accounts

II.1 Rules Which Apply to All Savings Accounts

(a) Interest. All accounts that earn interest are savings accounts. The rates and other information about how we calculate interest are set forth in the Rate Sheet(s). Interest begins to accrue on the day you deposit non-cash items (for example, checks). We use the daily balance method to calculate interest on your account. This method applies a daily periodic rate to the balance in your account each day. Certain accounts have tiered rates. This means that the interest rate you earn will depend on the daily balance in your account. The interest rates and annual percentage yields for each tier are shown on the Rate Sheet. You will earn the interest rate and resulting annual percentage yield applicable to your daily balance tier on the entire balance in your account.

(b) Minimum Balance to Earn Interest. For certain savings accounts, we require a minimum balance to earn interest. The amounts of these minimum balances are described on the Rate Sheet. We use the daily balance method to determine if the minimum balance requirement has been met. This method applies a daily periodic rate to the balance in your account each day. For accounts with a minimum balance requirement, you will only earn interest on days when your balance is not below the required minimum. You must maintain at least that balance in the account each day to obtain the disclosed annual percentage yield.

(c) Restrictions of Withdrawals. We have the right to require that you give us at least seven (7) days’ written notice to withdraw funds from any type of Savings, NOW, or Money Market Account. We would expect, except in unforeseen circumstances, to give advance notice of our intent to impose this requirement. Except for a NOW account, we can require that you make withdrawals in person only at the office where you opened your account.

II.2 Passbook Accounts

A passbook account is any account in which a passbook is issued. We record transactions for this account in your passbook or on separate documents. To make a passbook withdrawal, you must present the passbook and verify the balance before you leave. If you lose the passbook, inform us right away.

We do not permit preauthorized transfers from this type of account. If you intend to allow preauthorized transfers from an account, we may ask you to open a statement savings account for this purpose.

Our record of the transactions to your account is the official bank record of such transactions. If there is a difference between our records and the information on the passbook, we will consider our record to be correct.

II.3 Statement Savings Accounts

General Rule. We will send you a periodic statement for this account. Transfers by check or draft are not permitted from this account. We permit preauthorized transfers from this account. These preauthorized transfers include Point-of-Sale transfers. However, transfers to third parties by check, draft or similar order are not allowed from this account.

II.4 Money Market Accounts

Our Money Market Accounts are statement savings accounts from which you are permitted to make no more than six (6) preauthorized transfers per statement cycle, up to three (3) of which may be by check, draft, debit card (Point of Sale transfers) or similar order made by you and payable to third parties. Limitations on preauthorized transfers are further described in Section II.5 below.

II.5 Preauthorized Transfers, Telephone and Computer Transfers

You can make preauthorized transfers and telephone or computer transfers from our statement savings and money market accounts, subject to the limitations stated above. The limitations on preauthorized transfers do not apply to preauthorized transfers made to pay loans you have with us or to withdrawals or transfers to another account you maintain with us if made in person, by mail, or through an automated teller machine.

If you exceed the limitations on preauthorized transfers or telephone or computer transfers for three consecutive months, we may be required to close the account, take away the account’s preauthorized transfer capabilities, or convert the account to a NOW account or checking account. You may be charged a penalty as itemized in our Schedule of Charges if you exceed these limitations.

II.6 Certificate of Deposit (“CD”) Time Account

(a) The Term. A CD is a type of deposit which requires you to leave money in the account for a certain period of time (called the “term”) to earn interest throughout the term at the specified rate. The annual percentage yield assumes interest remains on deposit until maturity. A withdrawal will reduce earnings. CDs are subject to penalties for early withdrawal, that is, withdrawals before the “Maturity Date”. These penalties are described on the Rate Sheet and in Section II.6 (e) below. There is, however, no penalty for withdrawal of interest posted during the current term. The “Maturity Date” is the first day following the last day of the term. When you establish a CD, you may select any term that we currently offer, as described in our current Rate Sheet.

(b) Later Deposits. Except for Variable Rate IRA CDs, later deposits to CDs are not permitted. Later deposits to Variable Rate IRA CDs must be in amounts of $5.00 or more.

(c) Notice of Maturity. We are required by federal law to send a notice of maturity for all our automatically renewable CDs with terms greater than one month. We may, in our discretion, also send a notice of maturity for other CDs.

(d) Automatic Renewal of CDs. If you do not withdraw the funds from a CD account within the “grace period” of 7 calendar days after maturity, it will be automatically renewed as of the maturity date for the term documented on the rate sheet. If you elect against automatic renewal of your CD, you must instruct us (1) to renew the CD for a term which you specify and which we allow, (2) to deposit the funds in another account you maintain with us, or (3) to mail you a check. We must receive your instructions within the grace period. When properly renewed, your new CD will begin on the Maturity Date of the maturing CD. If the account is closed during the grace period we pay interest at the rate we were paying on the maturing CD from the Maturity Date until the date of withdrawal. If, on the Maturity Date we no longer offer the same type of CD as your CD, and you do not instruct us otherwise, the funds in the account will be placed in a CD which we offer, which we, in our discretion, determine is most similar to your CD. If you renew a CD or a CD is automatically renewed, all interest that is on deposit at the time of renewal will become principal of the renewed CD.

(e) Penalty for Early Withdrawal. We will allow a withdrawal from your CD account before the Maturity Date without penalty in the following instances: (1) a court’s declaration of your mental incompetence, or (2) your death. In all other cases you cannot withdraw all or any part of the principal before the Maturity Date without our consent. We can only give our consent at the time you ask to make a withdrawal. If we consent to an early withdrawal, we may impose a penalty on the amount that you withdraw. We may also impose a minimum penalty of seven (7) days’ interest on withdrawals from any CD made within seven (7) days of a deposit we permitted you to make during the term of the account. We may take all or part of the penalty from the original deposit, if necessary.

For CDs, with a scheduled term of twelve (12) months or less, the penalty will be an amount equal to ninety (90) days’ interest on the amount withdrawn at the rate being paid on the deposit. For CDs, with a term of more than 12 months, the penalty will be an amount equal to one hundred eighty (180) days’ interest on the amount withdrawn at the rate being paid on the deposit.

III. IRA Accounts

These accounts are governed by separate contracts and by the rules in this agreement for the type of IRA opened. If your IRA is a variable rate IRA Certificate of Deposit the interest rate and annual percentage yield on your account may change. We may change the interest rate on your account monthly. If such a change is made, it will be effective on the first Tuesday of each month, or, in the event of a holiday, on the first business day immediately following the first Tuesday. The new interest rate on your account is based on the previous month’s average auction rate for a six-month Treasury Bill plus a margin of .25 percentage points. You may make later deposits to the account in amounts of $5.00 or more. However, we may charge a penalty of 7 days interest on any withdrawal made within 7 days of a deposit.

IV. Rules For NOW Accounts

IV.1 Savings Account

A NOW account is a statement savings account upon which you can draw an unlimited number of checks. The rules for savings accounts described earlier in Section II.1 also apply to a NOW account.

IV.2 Limitation

A NOW account may be owned only by individuals for business or personal use or by certain non-profit organizations and governmental entities. For example, an individual can open a NOW account for a sole proprietorship.

V. Rules for Checking Accounts

V.1 Demand Deposit

A checking account is a demand deposit account. This means we do not reserve the right to require notice before withdrawal from these accounts and permit unlimited numbers of transfers by check. We do not pay interest on a checking account.

V.2 Availability

Checking Accounts may be owned by an individual or any form of legal entity.

VI. In Trust For or Beneficiary Designation

The “In Trust For” (“ITF”) or “Beneficiary” designation means that you intend to open an account under section 36a-296(a) of the Connecticut General Statutes (entitled “Deposits in Trust”) or the successor to that statute. These designations mean that you have full ownership of the account until your death. You, as the owner, must give us your Social Security number. When you die, the funds will belong to the beneficiary you have named if such a person is alive when you die. If you have named more than one beneficiary, the funds will belong equally to the beneficiaries who are alive when you die.

If this is a joint account with right of survivorship, when any of the owners of the account dies, any remaining owners will have full joint ownership until their deaths. When the last owner dies, the funds belong equally to the beneficiaries who are living at the time.

VII. Uniform Transfers to Minors Act ("UTMA")

If you have opened the account as custodian under the Connecticut Uniform Transfers to Minors Act, your rights and duties are governed by that Act. You must give us the minor’s Social Security number. You are not permitted to pledge the account as collateral for a personal loan.

VIII. Fiduciary Designation

VIII.1 Fiduciary

A fiduciary is a person or organization named by will, trust or other legal document or appointed by the court to manage the funds or property of another. A fiduciary may be named in a written agreement, such as a trust or power of attorney, or may be appointed by a court. If you have opened an account as a fiduciary, the funds belong to the trust estate and only the trustee(s) may withdraw funds or otherwise transact business with us for this type of account.

We require that you give us a certified copy of any trust instrument, court order or decree appointing you as a fiduciary. Whether or not a copy is on file with us, we will not be held responsible for the trust instrument contents or for any duty you may owe as trustee to any trust beneficiaries. The law and trust document or court order or decree will define your rights and duties as fiduciary.

VIII.2 Taxpayer Identification Number

We require that you provide a taxpayer identification number for any account that you open on behalf of a separately taxable entity, such as an estate.

VIII.3 Power of Attorney

A power of attorney is a legal document signed by a person giving a second person the power to act on the first person’s behalf.

If you are acting under a Power of Attorney, your right to deal with the funds in an account is determined by law and in the power of attorney. You must provide us with a certified copy of the power of attorney. The owner of the account may only withdraw funds from the account if he or she has also signed a signature card for the account.

A power of attorney ends when the person who signed it terminates it, dies, has a conservator appointed for his or her estate or, unless the power of attorney specifically provides otherwise, becomes disabled or incompetent.

The owner of an account and the person holding the power of attorney from the owner agree to notify us promptly if the power terminates. When a person holding a power of attorney makes a deposit to or a withdrawal from an account, that person is confirming that the power of attorney has not been terminated. We may rely on the power of attorney until we are given written notice that it has been revoked or terminated, and have had a reasonable opportunity to act on that notice.

Electronic Fund Transfer Disclosure

I. What is an "Electronic Funds Transfer"?

“Electronic Funds Transfer” (EFT) is a transfer of funds by electronic means. The term EFT includes all Point-of-Sale transfers, ATM transfers (deposits and withdrawals), direct deposits, electronic payments, and transfers initiated by telephone or by a computer terminal.

EFT accounts, which can be either a checking or savings account, must be in the name of a natural person and be used only for personal, family, or household purposes.

To initiate an EFT transaction an “access device” is used. This can be a card, a code, or any other means of access to an account that a consumer can use to initiate electronic fund transfers or a combination of these. A computer password will be the access device for your Online banking transfers.

II. What Types of Services are Available?

You may use your card, password or PIN to access your accounts in order to:

• Withdraw cash from your checking or statement savings account.
• Make deposits to your checking or statement savings account.
• Transfer funds between your checking, and statement savings accounts, or from your checking or statement savings account to your loan or mortgage account. Checking accounts include all types of demand deposit accounts, Money Market Demand Accounts, and NOW accounts.
• Pay bills through the Online Banking system
• Pay for purchases at places that have agreed to accept the card or PIN.

Some of these services may not be available at all terminals.

Visa® Check Card and Convenience Card - All information requested by us must be received prior to the issuance of any card. All cards will have full access to any accounts designated for use with the card. When using the Visa® Check Card to access your account to make a purchase through a merchant, you are authorizing us to withdraw funds from your checking account to pay for the purchase.

Check Conversion Services - You may authorize or consent to have merchants or businesses use your checks, or information from your checks to create one-time electronic payments from your accounts. Authorization for such transactions occurs if you receive notice that the transaction will be processed as an EFT and you complete the transaction.

III. What is a Business Day?

Business days are Monday through Friday. Holidays are not included.

IV. How Frequently Can Transfers be Made?

Using Your Access Card and PIN - You may withdraw up to $500 in cash each day using your Card and PIN. This daily limit applies separately to each cardholder, and applies even if you have access to more than one account with your Card and PIN. You may also use your card for purchases using your card and PIN up to $800 each day. Your total cash withdrawal and PIN purchases combined may not exceed $1,000 daily. Generally, if on a particular day, the amount of available funds in your accounts totals less than the daily limit, you may not withdraw or complete purchases for more than the total of available funds on that day with a Card and PIN. However, in our sole discretion we may allow you to pay for purchases even if your account does not contain sufficient available funds and you agree to pay the amount of the overdraft plus any applicable fee(s).

Using your Access Card without your PIN -Some merchants may allow you to use your Card without your PIN to pay for purchases. Generally, you may pay for purchases with your Card alone, without your PIN, up to the lesser of $3,000 or the amount of available funds in your account(s). However, in our sole discretion we may allow you to pay for purchases even if your account does not contain sufficient available funds and you agree to pay the amount of the overdraft plus any applicable fee(s).

When you make a purchase using your Card alone, without your PIN, you authorize us to put a hold on your account for the amount of the transaction. We will hold funds for these transactions up to the maximum transaction limit of $3,000 per account at any one time. The hold will remain on the account for up to a maximum of three business days. If the transaction clears the account within the three business days, the funds on which we have placed the hold will be debited from your account; the hold will be released and will no longer be counted toward your maximum transaction limit.

For security reasons, there are limits on the number of transfers you can make using our terminal and POS transfer service.

Using a Computer for Online Banking - The number of funds transfers and bill payments is unlimited except for Money Market Demand Accounts. If you use a Money Market Demand Account a maximum of six transfers per monthly statement cycle by either a computer, telephone, wire, or pre-authorized transfers is allowed of which no more than three may be made by check or debit card (other than withdrawals from an ATM).

Transfers may take up to one business day depending on the day and time the transfer is requested. Transfers will be made if funds are available. For security reasons, there are limits on the dollar amount of transactions from your accounts.

V. What if a Transfer is Not Made?

If we do not complete a transfer to or from your account on time or in the correct amount according to our agreement with you, we will be liable for your losses or damages. However, there are some exceptions. We will not be liable, for instance:

• If, through no fault of ours, you do not have enough money in your account to make the transfer
• If the automated teller machine where you are making the transfer does not have enough cash
• If the terminal or system was not working properly and you knew about the breakdown when you started the transfer
• If the computer, software, or Internet Service Provider you used to conduct the transaction fails or malfunctions
• If you have not provided complete, correct and current information needed to make a transfer or process a bill payment
• If you do not authorize a bill payment allowing sufficient time for the payment to be made and properly credited by the payee by the time it is due or if the payee fails to credit your account promptly upon receipt
• If circumstances beyond our control (such as fire or flood) prevent the transfer, despite reasonable precautions that we have taken
• For any indirect, incidental, special or consequential damages that were not intentional but the result of a bona fide error, notwithstanding our procedures to avoid such errors

There may be other exceptions stated in our agreement with you.

VI. What Documentation Will You Receive?

You can get a receipt at the time you make any transfer to or from your account using one of our automated teller machines (ATMs) or Point-of-Sale terminals.

If you have arranged to have direct deposits made to your account at least once every 60 days from the same person or company, you can call us at 203.729.4442 (or toll free 1.877.729.4442) to find out whether or not the deposit has been made.

You will get a monthly account statement (except for passbook accounts where only preauthorized deposits are allowed). If you bring your passbook to us, we will record any electronic deposits that were made to your account since the last time you brought in your passbook.

You can get balance and transactional information on any day. This information may only be current as of the close of business on the previous business day.

If you make a transfer from one account to another, you will receive a confirmation of the transaction. If applicable, you are advised to print this confirmation.

VII. Can Payments Be Stopped?

If you have told us in advance to make regular payments out of your account, you can stop any of these payments. Here’s how: Call us at 203.729.4442 (or toll free at 1.877.729.4442), or write us at Naugatuck Savings Bank, 251 Church Street, Naugatuck, CT 06770-0370 Attn: Operations Department, in time for us to receive your request 3 business days or more before the payment is scheduled to be made. If you call, we may also require you to put your request in writing and get it to us within 14 days after you call.

If these regular payments vary in amount, either we or the person you are going to pay will tell you, 10 days before each payment, when it will be made and how much it will be. You may choose instead to get this notice only when the payment would differ by more than a certain amount from the previous payment, or when the amount would fall outside certain limits that you set.

If you order us to stop one of these payments 3 business days or more before the transfer is scheduled, and we do not do so, we will be liable for your losses or damages. If you have transmitted an Online bill payment request, you can void your request using the Online Banking system. Your request to void the transaction must be transmitted prior to the bill payment transmit date.

If you are unable to access the Online Banking system and wish to void an individual or recurring bill payment request, you can call us at 203.729.4442 (or toll free 1.877.729.4442), or write us at Naugatuck Savings Bank, 251 Church Street, Naugatuck, CT 06770-0370 Attn: Operations Department and we will make a good faith effort to stop the processing of the bill payment request. Your instructions must describe the bill payment request with reasonable certainty (it must include the transmit date, amount of payment and payee). We will not be liable if we fail to stop the processing of a bill payment request because you did not provide us with sufficient information or you did not allow us a reasonable opportunity to act on it. We will not be liable if the processing of a bill payment request causes checks drawn on your account to be returned for insufficient funds. If we do stop the processing of a bill payment request at your direction, you agree to pay all costs we may incur as a result. Oral or written stop payment instructions are good for 180 days unless we receive written notice to remove it or renew it before the 180 day period expires. If you ask us to stop one of these payments 3 business days or more before the bill payment request is scheduled to be processed, and we do not do so, we will be liable for your losses or damages.

VIII. What are the Charges for EFT Services?

Any charges for EFT services are contained in NSB‘s Schedule of Charges under the heading “Electronic Banking Fees”. Other parties may impose surcharges when transactions are initiated from ATMs not operated by NSB.

We reserve the right to terminate any of the above described services without notice. All Visa® Check Cards and Convenience Cards are the property of the bank and must be returned to us immediately upon termination.

IX. What Third Parties Will Be Given Information?

We will disclose information to third parties about your account or the transfers you make:

• Where it is necessary for completing transfers, or
• In order to verify the existence and condition of your account for a third party, such as a credit bureau or merchant, or
• In order to comply with government agency or court orders, or
• If you give us your written permission

X. What You Should Do if Your Card or Password is Lost or Stolen?

In order to limit your liability, tell us AT ONCE if you believe your card, PIN, or password has been lost or stolen or is in the possession of an unauthorized person, or if you believe that an electronic fund transfer has been made without your permission using information from your check. Telephoning is the best way of keeping your possible losses down. You could lose all the money available for withdrawal in your account. If you tell us within two business days you can lose no more than $50 if someone used your card, password, or PIN without your permission. If you do NOT tell us within two business days after you learn of the loss or theft of your card, password, or PIN, and we can prove we could have stopped someone from using the money in your accounts without your permission if you had told us, you could lose as much as $500.

Also, if your statement shows transfers that you did not make, including those made by card, PIN, password or other means, tell us at once. If you do not tell us within 60 days after the statement was mailed to you, you may not get back any money you lost after the 60 days if we can prove that we could have stopped someone from taking the money if you had told us in time.

If a good reason (such as a long trip or a hospital stay) kept you from telling us, we will extend the time periods.

If you believe your card or PIN has been lost or stolen or that someone has transferred or may transfer money from your account without your permission, call us at 203.729.4442 or toll free 1.877.729.4442 or write us at Naugatuck Savings Bank, 251 Church Street, Naugatuck, CT 06770-0370 Attn: Operations Department.

You should also call the number or write to the address listed above if you believe a transfer has been made using the information from your check without your permission.

XI. What Should You Do In Case of Errors or Questions?

In case of errors or questions about your electronic transfers, call us at 203.729.4442 (toll free 1.877.729.4442) or write us at Naugatuck Savings Bank, 251 Church Street, Naugatuck, CT 06770-0370 Attn: Operations Department as soon as you can, if you think your statement or receipt is wrong or if you need more information about a transfer listed on the statement or receipt. We must hear from you no later than 60 days after we sent the FIRST statement on which the problem or error appeared.

We will need to know:

• Your name and account number
• A description of the error or the transfer you are unsure about, and a clear explanation of why you believe it is an error, or why you need more information
• The dollar amount of the suspected error

If you tell us orally, we may require that you send us your complaint or question in writing within 10 business days.

We will determine whether an error occurred within 10 business days after we hear from you and will correct any error promptly. If we need more time, however, we may take up to 45 days to investigate your complaint or question. If we decide to do this, we will credit your account within 10 business days for the amount you think is in error, so that you will have the use of the money during the time it takes us to complete our investigation. If we ask you to put your complaint or question in writing and we do not receive it within 10 business days, we may not credit your account.

We will tell you the results within three business days after completing our investigation. If we decide there was no error, we will send you a written explanation. You may ask for copies of the documents that we used in our investigation.

Additional Terms for OnLine Banking

Online Banking is a service provided to you by Naugatuck Savings Bank which permits you to access your accounts with Naugatuck Savings Bank in order to transfer funds, pay bills, or check the status of your accounts. You can access these services through the use of a personal computer and an Internet Service Provider.

In order to use this service you must be a deposit account customer of Naugatuck Savings Bank.

Naugatuck Savings Bank is not responsible for the equipment and software you may use to access or use in conjunction with, our Online Banking program, nor for any errors, failures, malfunctions, computer viruses, or related problems that may be associated with the use of the Online Banking program. WE DISCLAIM ALL WARRANTIES REGARDING YOUR COMPUTER AND SOFTWARE AND THEIR USE THROUGH THE NAUGATUCK SAVINGS BANK ONLINE BANKING SYSTEM, EXPRESSED OR IMPLIED, INCLUDING BUT NOT LIMITED TO, IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.

I. Services Available

The Naugatuck Savings Bank Online Banking system has been designed to allow you to control your financial tasks from a personal computer. Depending on the services requested you will be able to:

• View a summary of your accounts, including loans, held at Naugatuck Savings Bank
• Transfer funds between accounts
• Access information regarding deposits, checks, electronic debits and credits, and ATM transactions
• Establish payees and schedule current, future, recurring or non-recurring payments
• Categorize payments for budgeting and tax purposes

II. Program Highlights

You may use the Online Banking System to contact us by email. The bank may not receive the e-mail immediately so if there are instances that need immediate attention, please contact us directly. Also, if the reason for your contact relates to specific transactions on your account, please call our office. Do not send account numbers, passwords, balances, or other private information by email.

The bill payment feature to this system works this way:

You may authorize the bank to make a payment on your behalf to any person or entity with an address in the United States. The payment will be deducted from your account and either transferred electronically or sent by check to the payee you have named. Your authorization in this manner allows the bank to process these payments without your signature. You must have sufficient funds available in order to complete any authorized payments. Checks, electronic payments, withdrawals or other instruments drawn on your account will be paid by the bank in any order decided by the bank.

You should allow at least eight (8) business days before the due date of your payment for payments to be sent, and subsequently received and processed by the payee. Recurring payments can be set up in the Online Banking system for the same payee in the same amount and on the same date each month. Payments that are to be sent on a Saturday, Sunday or holiday will be processed on the next business day. Payment instructions must be received by 2:00pm to be processed on that day. The bank is not responsible for delays in the delivery of payments by the U.S. Postal Service nor for any late charges or finance charges that may be imposed as a result of your payment not being received or processed by the due date by the payee. Since each individual has a personal user name and password, no transfers or payments may be made from any account that requires more than one signature.

The bank reserves the right to terminate your accounts and the use of the Online Banking system at any time. Upon termination the bank will make no further transfers or payments from your account, including any transactions you have previously authorized.

Expedited Funds Availability

Our policy is to make funds from your deposits at a staffed teller station available to you immediately. Funds from electronic direct deposits and wire transfers into your account will be available on the day we receive them. Funds from deposits at an unstaffed facility, such as an ATM, are available to you on the 1st business day after the banking day of your deposit. Once available, you can withdraw the funds in cash and we will use the funds to pay checks that you have written.

For determining the availability of your deposits, every day is a business day, except Saturdays, Sundays and federal holidays. If you make a deposit before 2:00pm on a business day that we are open, we will consider that day to be the day of your deposit. However, if you make a deposit after 2:00pm or on a day that we are not open, we may consider that the deposit was made on the next business day we are open.

I. Longer Delays May Apply

In some cases, we may not make all of the funds that you deposit by check at a staffed teller station available to you on the day of your deposit. Likewise, in some cases, we may not make all of the funds that you deposit by check at an unstaffed facility available to you on the first business day after the day of deposit. Depending on the type of check that you deposit, funds may not be available until the 2nd business day after the day of your deposit. However, the first $100.00 of your deposits will be available on the first business day after the day of deposit.

If we cash a check for you that is drawn on another bank, we may withhold the availability of a corresponding amount of funds that are already in your account. Those funds will be available at the time funds from the check we cashed would have been available if you had deposited it.

If we accept for deposit a check that is drawn on another bank, we may make funds from the deposit available immediately but delay your ability to withdraw corresponding amounts of funds that you have on deposit in another account with us.

If we are going to delay the availability of the funds from your deposit or if we are going to delay the availability of funds in another account, we will notify you at the time you make your deposit. We will also tell you when the funds will be made available. If your deposit is not made directly to one of our employees, or if we take this action after you have left the premises, we will mail you the notice by the day after we receive your deposit.

If you need the funds from a deposit right away, you should ask us when the funds will be available.

In addition, funds you deposit by check may be delayed for a longer period under the following circumstances:

• We believe a check you deposit will not be paid
• Your deposit checks totaling more than $5,000.00 on any one day
• We/You redeposit a check that has been returned unpaid
• You have overdrawn your account repeatedly in the last six months
• There is an emergency, such as failure of communications or computer equipment

We will notify you if we delay your ability to withdraw funds for any of these reasons, and we will tell you when the funds will be available. They will generally be available no later than the 7th business day after the day of your deposit.

II. Special Rules for New Accounts

If you are a new customer, the following special rules may apply during the first 30 days your account is open.

Funds from electronic direct deposits and wire transfers into your account will be available on the day we receive them. Funds from deposits of cash and the first $5,000.00 of a day’s total deposits of cashier’s, certified, teller’s, traveler’s and federal, state and local government checks will be available on the day of your deposit if the deposit meets certain conditions. For example, the checks must be payable to you. If you do not make the deposit in person to one of our employees, the first $5,000.00 will not be available until the first business day after the day of your deposit. Funds in excess of $5,000.00 of a day’s total deposits of cashier’s certified, teller’s, traveler’s and federal, state and local government will generally be available immediately if the deposit is made at a staffed teller station, and on the first business day after the day of deposit if the deposit is made at an unstaffed facility. In some cases, we may delay the availability of such deposits to a new account. If we do, the funds may not be available until the ninth business day after the deposit.

However, if we are going to delay the availability of the funds, we will notify you at the time you make the deposit. We will also tell you when the funds will be made available. If your deposit is not made directly to one of our employees, or if we take this action after you left the premises, we will mail you the notice by the day after we receive your deposit.

If you need the funds from a deposit right away, you should ask when the funds will be available.

PRIVACY POLICY STATEMENT

At Naugatuck Savings Bank, we value your business and the trust you placed in us to protect personal information about you and your finances. We understand that our customers furnish private information to us and our affiliates in the course of daily business. Knowing that our customers expect privacy and security for their personal and financial affairs, we are committed to treating such information responsibly.

We have established safeguards designed to keep information provided to us private and confidential. When we do use information, it is to help us identify affordable products and services that might serve you better.

This notice describes the privacy practices of Naugatuck Savings Bank and its family of affiliated companies: Nutmeg Financial, MHC, John M. Sutherland, Inc., Nutmeg Financial Holdings, LLC and NSB Mortgage Corp. It outlines our practices regarding personally identifiable financial information (or “nonpublic personal information”) for current and former customers.

The Information We Collect

In order to provide you with financial products and services, we collect nonpublic personal information about you from several sources, including the following:

• Information we receive from you on applications or other forms
• Information about your transactions with us, our affiliates, or others
• Information we receive from a consumer reporting agency

Information We Disclose

In order to improve service to our customers, we may share information about current or former customers within our family of affiliated businesses. By sharing this information, we can promote efficiencies and reduce costs to our customers. The types of information that we may share among our affiliates include the following:

• Identification information, such as name, address and telephone number
• Transactional information
• Deposit or loan experience
• Information we receive from you on applications and other forms
• Information we receive from a consumer reporting agency

Examples of the types of businesses we are or may become affiliated with are listed below:

• Insurance Companies
• Brokerage Companies
• Other Banks
• Mortgage Companies
• Financial Service Providers

You may direct us not to disclose information that does not relate solely to our experiences or transactions with you or your account (such as the application information and credit bureau information) to our affiliates. In order to do so, you must mail a written request, with your name, address, taxpayer identification number, and account number to: Customer Information Officer, Naugatuck Savings Bank, P.O. Box 370, Naugatuck, CT 06770 or call us at 203.729.4442 or toll free at 1.877.729.4442. We will honor your choice on restricting information sharing.

Information We May Share With Non-affiliated Companies

Naugatuck Savings Bank does not disclose nonpublic personal information to any non-affiliated third parties, except as permitted by law.

The Bank may share certain information with carefully selected, trusted business partners for promotional or marketing purposes under strict confidentiality agreements. In the normal course of business, we may disclose all of the information that we collect as previously described, on our customers and former customers, to companies that perform marketing services for us or to other financial institutions with whom we have joint marketing arrangements. Examples of these companies are:

• Financial institutions with which we have joint marketing arrangements, such as insurance companies, broker-dealer, insurance agencies and others
• Companies that provide marketing services for us, such as bulk mailing companies, direct marketing companies, market research firms and marketing consultants

In these cases, the Bank will enter into an agreement with the third party that will require the third party to maintain confidentiality of the information in the same manner the Bank would and to restrict its use.

The Bank will not provide your personal information to non-financial companies for the purpose of their independent telemarketing or direct mail marketing of any non-financial products or services.

We may provide information to companies that perform services for us in connection with your accounts, such as data processing and software companies and collection agencies.

Other Exceptions

Other examples of when we disclose customer information outside of our family of affiliated businesses:

• To consumer reporting agencies
• For fraud, security or risk control
• To help complete a transaction that you initiate, including information requested to verify the existence or condition of an account
• To resolve disputes or inquiries you may have about your accounts
• When you consent or direct us to provide information about your accounts. This may be oral, in writing, by telephone, electronic or other means as we recognize.
• When disclosure is required by law, such as pursuant to a court order, subpoena, legal process or government agency examination or investigation, or to protect or enforce our rights.
• As otherwise necessary to service your account, or as permitted or required by law

The Protection of Information

Naugatuck Savings Bank has established physical, electronic and procedural safeguards to prevent the unauthorized access of information by persons outside the Bank in compliance with federal standards. These safeguards are tested and maintained by Bank personnel in accordance with the Bank’s policies and procedures. Employees are trained as to the importance of maintaining privacy when dealing with your information. Employees are restricted from accessing your personal information unless the position of the employee warrants a need for the information.

The Bank also has procedures in place for maintaining complete and accurate information. All information is corrected immediately upon notification.

This notice is a summary of our policies and procedures and does not constitute a contract. We reserve the right to revise the policies and procedures described in this notice, as allowed by law. If you have any questions regarding the Naugatuck Savings Bank Privacy Policy, call us at 203.729.4442 or toll free 1.877.729.4442, stop by any branch location or visit our website at www.naugatucksavingsbank.com