Hi everyone -

So management is designing a new savings account which will have tiered interest rates based on average balance. Marketing and operations were talking and came up with the idea of creating 6 tiers (for future flexibility with system configuration), but only utilizing 3 at the moment.

A hypothetical example - notice the first four tiers are the same rate:

$1-2500 = .1%
$2501-5000 = .1%
$5001-10,000 = .1%
$10,001-25,000 = .1%
$25001-100,000 = .25%
$100,001+ = .50%

It would be laid out in our Truth in Savings disclosure just like above, but for marketing and advertising purposes do each of the six tiers need to be in the fine print, or can all the ".1%" tiers be combined (ie: average account balance of $1-25000 will earn a .1% APY)?

1.Tiered-rate accounts.

An advertisement for a tiered-rate account that states an annual percentage yield must also state the annual percentage yield for each tier, along with corresponding minimum balance requirements. Any interest rates stated must appear in conjunction with the applicable annual percentage yields for each tier.

Hm, "for each tier". I wonder if you would okay to lay out your tiers in the mouse print but combine them in the larger print - that way it wouldn't be misrepresenting the truth as long as your ads were dated to match the offer.

Also, what tiering method are you using - Method A or Method B?

Gilamonster - that's exactly what I'm struggling with!



Randy - We will be using 'Method B', where if your balance puts you in tier 5, the corresponding interest rate will be paid for the entire balance.

There is no required comparable font sizes for the various tier as long as it disclosed and not deemed to be misleading. As to combining the tiers, if you do that then then want to break them out later, it will trigger a change of terms.