Find which dollars earn which APY
| Situation | What to do next |
|---|---|
| Balance below minimum | Use the fallback rate and include any fee. |
| Balance crosses a tier | Confirm whole-balance versus portion treatment. |
| Promotion has a cap | Price excess cash at its actual rate. |
Draw the tier schedule
List every threshold, rate and activity condition. Confirm whether crossing a threshold changes the entire balance or only dollars within a tier.
Determine whether the institution applies one rate to the entire balance or different rates to slices of the balance. The same advertised top tier can produce different total interest under those methods. Ask what happens when the balance crosses a threshold during the month.
Test the normal balance
Use an average balance rather than a one-day maximum. Include months when withdrawals or deposits move the account between tiers.
Break the expected balance into the disclosed tiers and calculate each part separately when required. Do not apply the highest APY to cash that does not qualify.
Build a reliable cost comparison
Watch caps and fallback rates
A promotional APY on a small capped amount can produce less total interest than a lower uncapped APY on the full balance.
Test balances near a threshold and include monthly fees or activity conditions. A slightly lower no-tier account may produce more net interest and require less monitoring.
Keep these three outcomes separate
A headline APY may apply only to a defined balance range.
Some tier structures apply one rate to the whole balance; others apply rates by portion.
The useful comparison is interest on your expected balance.
Primary sources
- FDIC: Deposit account basicsOfficial reference ↗
- CFPB Regulation DD: deposit disclosuresOfficial reference ↗
Answers to check before you act
Does the highest tier apply to my full balance?
It depends on the account method. The disclosure should explain whether rates apply to the whole balance or separate portions.
Why is my earned rate below the headline?
Balance tiers, time in the account, fees and changing rates can reduce realized earnings.