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#2136141 - 06/27/17 09:37 PM Reg DD / Tiered Account Methods
Believing... Offline
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Joined: Apr 2012
Posts: 298
In the mountains
I'm creating new TISA disclosures--something that only happens maybe once every decade, as platform systems change. I'm having a hard time wrapping my brain around methods A vs. B for tiered accounts. Is there an easy way to distinguish between the two? I was hoping the core parameters would spell it out, but no such luck. Any wisdom would be much appreciated.

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#2136145 - 06/27/17 10:09 PM Re: Reg DD / Tiered Account Methods Believing...
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 79,651
Galveston, TX
One pays the interest rate on just the amount that is in that tier. The other pays the interest rate on the whole balance depending on the tier of the account balance. This could be daily or some average balance for the statement cycle.
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#2136146 - 06/27/17 10:28 PM Re: Reg DD / Tiered Account Methods Believing...
Doug Hendrickson Offline
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Doug Hendrickson
Joined: Oct 2009
Posts: 3,927
If you're asking how to tell from the system, the core parameters may spell it out, but it most likely depends on the vendor as to how that is done. For instance, our uses the term Rate Method, and you can select it as follows below. We keep it simple and use the "Entered Rate" which equates to Method A. I would ask your vendor to ensure that you're choosing, and disclosing, the method you choose.
===========================================================================================

Rate Method - Select the type of rate used when calculating primary earnings.

0 - Entered Rate - Earnings are calculated on a single balance range where the account balance falls.

1 - Weighted Rate - Earnings accrue at an average rate when there is a change made to the interest rates and the account balance does not fluctuate between tiers during the earnings cycle. The earnings accrue at an average WEIGHTED rate when there is a change made to the interest rates and/or the account balance DOES fluctuate between tiers during the earnings cycle.

2 - Split Rate - Earnings are accrued for multiple balance ranges and rates where the account balance falls.
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#2142321 - 08/16/17 08:00 PM Re: Reg DD / Tiered Account Methods Doug Hendrickson
ckme Offline
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ckme
Joined: Sep 2002
Posts: 245
I have another question about tiered rates. If you have a minimum balance to earn interest (Interest accrues on the entire balance only on days that the daily balance is $1,000 or more, if below $1,000 the no interest accrues for that day), do you have to show a 0% tier or would you just show the current rate and APY and the minimum balance of $1,000 is required to earn interest statement.

I am confused if you have to show a 0 tier, then do you state that $0 is the minimum balance to earn the disclosed APY, since you disclosed a 0.00% APY.

If I am completely off on this, please state how you would handle the TISA.

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