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Concerns When Offering MMA with Multiple Tiers

Are there any concerns with offering a money market account that has multiple tiers, where each tier would have the same interest rate and APY?

by David Dickinson: If different tiers have the same interest rate/APY, why do you have tiers? That would be my concern.


by Jim Bedsole: We've had situations in the past where we wanted to maintain the flexibility of offering different rates for different tiers in the future but currently have those tiers at the same rate. By disclosing the different tiers, but with the same rate and also disclosing as variable rate, it saves you from having to do an advance change in terms notice when you do get ready to differentiate rates between tiers. If you've disclosed all of the tiers even with their rates the same, then when rates change there is no advance notice requirement for the change.

If your plan isn't to differentiate rates in the future, then I would agree with David that there seems to be no point in having the tiers.

First published on 07/02/2017

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