TIME CERTIFICATES OF DEPOSIT
RULES OF CLASS

Thank you for investing in a Home Federal Certificate of Deposit. This document has been prepared for your reference so that you will be fully aware of the rules established by the Home Federal Board of Directors for your account.

RATE: The rate of earnings on your certificate at issue date and at renewal will be determined by Home Federal. You may obtain rate information by calling us at 308-382-4000. For variable rate certificates, the index printed on the face of the certificate at account opening determines the rate of earnings for the initial terms. Additional deposits to variable rate individual retirement account certificates earn at the rate in effect for the deposit when the deposit is made until the next rate adjustment. For Escalator Certificates, the rate you will earn on your certificate at the issue date and each renewal date during the next twelve periods will be determined by Home Federal and given to you when you purchase your certificate.

SUBSEQUENT ADDITIONS: Additions to the principal balance are permitted as shown on Exhibit A. Additions will not extend the term of the certificate and will earn interest at the current rate for the deposit for the remaining term for fixed rate certificates or governed by the rate in effect for variable rate certificates.

DETERMINATION DATES: Earnings will be paid from the date of deposit up to but not including the date of withdrawal.

CALCULATION OF EARNINGS: All certificates use the DAILY BALANCE METHOD.   This method applies a daily periodic rate to the principal in the account each day.

FREQUENCY OF DISTRIBUTION OF EARNINGS: Earnings may be transferred to a separate savings or checking account, or mailed to you on a monthly, quarterly, semi-annual or annual basis. Earnings may remain in the account, compounded, based on the methods listed on Exhibit A. For 12 Month Escalator Certificates: The 12 month term is composed of 12 monthly periods. At each monthly maturity date, you may: 1) Have your earnings transferred to a separate savings or checking account; 2) Leave your earnings in your certificate account where they compound; or 3) Get a monthly check. For 36 Month Escalator Certificates: The 36 month term is composed of 12 quarterly periods. At each quarterly maturity date, you may: 1) Have your earnings transferred to a separate savings or checking account; 2) Leave your earnings in your certificate where they compound; or 3) Get a monthly check.

WITHDRAWAL GRACE PERIOD: For fixed and variable rate accounts, if you withdraw the balance of your account within seven days after the maturity date, the certificate rate prior to maturity will be paid from the maturity date to the date of withdrawal without any reduction for penalty. For 12 and 36 Month Escalator Certificates, if you withdraw the balance of your account within seven days after the maturity date, the current first period rate for a new Escalator Certificate for the same term will be paid from the certificate maturity date to the date of withdrawal without any reduction or penalty.

PARTIAL WITHDRAWALS: Partial withdrawals will be permitted down to the minimum balance level shown on Exhibit A, subject to appropriate early withdrawal penalties. The annual percentage yield assumes interest will remain on deposit until maturity.

PENALTY FOR EARLY WITHDRAWALS: For any withdrawal of principal prior to the maturity date, you are subject to a penalty for early withdrawal.

For fixed and variable rate certificates, the penalty requires that you forfeit an amount, whether earned or not, equal to the greater of:

1. Three (3) months’ interest on the amount withdrawn if the term is less than one (1) year.
2. Six (6) months’ interest on the amount withdrawn if the term is one (1) year or greater.
3. Replacement cost which is defined as the difference between the original or last renewal certificate rate and the current rate paid by Home Federal, if it is higher, for the remaining term calculated on the amount withdrawn.

For 12 and 36 Month Escalator Certificates, the penalty requires that you forfeit an amount, whether earned or not, equal to the greater of:

1. Three (3) months’ interest.
2. Replacement cost which is defined as the difference between the original or last renewal certificate rate and the current rate paid by Home Federal, if it is higher, for the remaining term calculated on the amount withdrawn.

Penalties for fixed and variable rate certificates are calculated using the weighted average of rates in effect during the term of the certificate. Penalties for 12 and 36 Month Escalator Certificates are calculated using the current rate in effect on the certificate. Any withdrawal which reduces the account balance below the minimum requirement shown on Exhibit A or any change in term will be considered a withdrawal of the entire account balance and subject to the prescribed early withdrawal penalty.

No penalty will be applied for early withdrawal from any certificate account after the death of an account owner or after an account owner is determined to be legally incompetent. For Individual Retirement Accounts, there will be no penalty imposed in the event of a withdrawal to effect a distribution following the death, an account owner is determined to be legally incompetent, or disabled.  Interest penalties that are imposed on Individual Retirement Accounts are equal to those imposed on all other certificates and the amount withdrawn is subject to applicable tax penalties.

AVAILABILITY OF EARNINGS: Earnings credited to fixed and variable rate accounts may be withdrawn at any time after payment and prior to maturity without penalty.   Earnings in the account on the renewal date will be merged with the principal balance and only earnings for the current renewal term may be withdrawn without penalty during the current term.

AUTOMATIC RENEWAL PROVISION: As outlined on Exhibit A, most certificates will be automatically renewed at the close of business on the initial maturity date or on the maturity date of any renewal term at the rate determined by Home Federal unless: 1) You withdraw during the seven (7) day grace period after maturity; 2) You withdraw prior to the maturity date; or 3) Home Federal provides you with written notice that this account will not be renewed. In the latter case, fixed and variable rate accounts will cease to earn interest after maturity.

RIGHT TO CHANGE CONDITIONS: Home Federal reserves the right to alter or amend these rules at any time. Any changes that have an adverse impact on your account will be disclosed to you in writing and become effective at the next renewal date of your certificate. For Escalator Certificates, any changes we make will be effective at the end of the twelfth periodic renewal period.

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