As of Oct. 16, 2026
If your bank advertises a top-tier APY: read whether it uses Method A or Method B, then compare the APY for your balance tier — not only the headline “up to” rate. On Method B, dollars in lower tiers still earn the lower rates, so your effective yield is below the top advertised rate unless every dollar is in the top tier.
The math:
Sources: Reg DD Appendix A Part I.D (Fed mirror) · FDIC Truth in Savings exam manual (May 2023) · Fed B-1 model clauses
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Formula shown: simple interest = sum(slice × rate) for 365 days; simple yield = 100 × Interest ÷ Principal. This is not daily-compound bank APY. Regulation DD Appendix A disclosed APYs use compounding; the appendix dollar examples assume daily compounding. Enter rates from your disclosure or keep the Reg DD example defaults (5.25% / $2,500 · 5.50% / $15,000 · 5.75% above).
Method A: one stated rate on the full balance (the tier your balance falls in). Method B: each rate applies only to the portion of the balance in that tier.
Appendix A Part I.D uses this assumed structure for its Method A and Method B examples:
| Interest rate | Deposit balance required to earn rate |
|---|---|
| 5.25% | Up to but not exceeding $2,500 |
| 5.5% | Above $2,500 but not exceeding $15,000 |
| 5.75% | Above $15,000 |
Source: Reg DD Appendix A Part I.D (Fed mirror).
The institution pays the stated rate for the applicable tier on the full balance. Example from the appendix: an $8,000 deposit earns 5.50% on the entire $8,000.
Only one APY applies to each tier; within a tier the APY does not vary with the principal assumed.
| Example deposit | Interest (daily compounding in appendix) | APY |
|---|---|---|
| $1,000 | $53.90 | 5.39% |
| $8,000 | $452.29 | 5.65% |
| $20,000 | $1,183.61 | 5.92% |
Source: Reg DD Appendix A Part I.D (Fed mirror) (appendix assumes daily compounding for these dollar amounts).
The institution pays the stated rate only on the portion of the balance within each tier. Example: $8,000 → 5.25% on $2,500 + 5.50% on $5,500.
Disclosures show a range of APYs for each tier other than the first (which has a single APY). The low end of a range uses the minimum principal that earns that tier’s rate; the high end uses the highest principal in that tier (or an assumed maximum if the account has no cap).
| Tier | Disclosed APY / range | Detail |
|---|---|---|
| First | 5.39% | Single APY throughout the first tier (same idea as Method A first tier) |
| Second | 5.39% to 5.61% | Low at $2,500.01; high at $15,000 |
| Third (assuming $100,000 max) | 5.61% to 5.87% | Low near $15,000.01; high at assumed $100,000 maximum |
Source: Reg DD Appendix A Part I.D (Fed mirror).
Not financial advice. We republish Regulation DD Appendix A examples and FDIC Truth in Savings definitions with dates. The calculator does arithmetic on rates and balances you enter (or the Reg DD example defaults). It does not recommend a bank or tell you which method is better for you. Confirm terms with your institution’s disclosure.
Under Regulation DD Appendix A Part I.D, Method A pays the stated rate for the applicable tier on the full balance (whole-balance / plateau). Method B pays each stated rate only on the portion of the balance within that tier (partial / blended). Method B disclosures show an APY range for tiers other than the first.
On Method B, lower tiers still earn lower rates on those dollars. Even on Method A, you only get the top tier’s rate once your full balance is in that tier. Ads that state an APY for a tiered-rate account must also state the APY for each tier with minimum balances (Reg DD § 1030.8 / FDIC Truth in Savings manual).
Simple interest = sum(slice × rate) for 365 days; simple yield = 100 × Interest ÷ Principal. Method A uses one rate on the full balance; Method B splits the balance into tier slices. This is labeled as a simple annual illustration — bank APYs use compounding per Appendix A.
No. Deposit insurance coverage does not depend on Method A or Method B. Coverage is still generally $250,000 per depositor, per insured institution, per ownership category — see VaultRubric’s FDIC / NCUA coverage checker.
No. We republish Regulation DD and FDIC material with dates and do arithmetic on numbers you type. We do not recommend a bank, rate, or method.
Estimates, not financial advice. Taxes, insurance, PMI and fees vary by lender, county and city; confirm with your lender, dealer and state agency before acting.