A bank advertises 4.75% APY on its savings account. You open the account, deposit $5,000, and six months later check your interest earned. The math doesn't add up. You've earned far less than 4.75% would imply. What happened?
There are several common mechanisms that create a gap between the advertised rate and what you actually earn. Understanding them lets you evaluate offers more accurately and avoid the most common traps.
Tiered rates: the most common mismatch
Many banks structure savings account rates in tiers. The headline rate — the one featured prominently in advertising — applies only to balances above a certain threshold. Below that threshold, you earn a much lower rate.
Here's what a tiered structure often looks like in practice:
| Balance tier | Advertised APY |
|---|---|
| $0 – $9,999 | 0.25% |
| $10,000 – $49,999 | 1.80% |
| $50,000 – $99,999 | 3.20% |
| $100,000+ | 4.75% |
The 4.75% is real — but only if you have $100,000 or more sitting in this account. The person depositing $5,000 earns 0.25%. The headline rate is accurate; it just doesn't apply to most customers.
Promotional rates: time-limited and easy to miss
Some accounts offer an elevated "introductory" or "promotional" rate for a set period — 3 months, 6 months, or 12 months — after which the rate drops to the bank's standard rate. The promotional rate is often the one featured in advertising. The standard rate it reverts to may be a fraction of that.
This is especially common in checking accounts with interest or specialty savings products. You sign up expecting 4.00%, earn it for 90 days, and then automatically drop to 0.75% without any notification unless you read the disclosure carefully.
Signs of a promotional rate
- Fine print that mentions "for new customers" or "for the first X months"
- A secondary rate listed alongside the headline rate in the disclosure
- An offer tied to a specific deposit amount or account opening date
Activity requirements: earning the full rate
Some high-yield checking accounts — particularly from credit unions — offer strong rates but require you to meet monthly activity criteria. Common requirements include:
- Making 10–15 debit card transactions per month
- Receiving a direct deposit of a minimum amount
- Logging into online banking at least once per month
- Using the bank's bill pay service
If you don't meet the requirements, the rate drops — sometimes to 0.01%. For people who use a different bank for daily transactions, qualifying can be genuinely inconvenient. The account may still be worth it, but only if you're willing to route spending through it.
Balance caps: the full rate stops applying
Some accounts offer the advertised rate only up to a maximum balance. Balances above the cap earn a dramatically lower rate. An account might pay 5.00% on balances up to $15,000 and 0.25% on anything above that. This limits how much you benefit from depositing a larger sum.
How to actually compare savings account rates
When evaluating a savings rate, look for three things:
- The APY at your specific balance. Not the headline rate — the rate that applies to what you'll actually deposit.
- Whether the rate is promotional. If so, what's the standard rate afterward?
- Any monthly activity requirements. Are they realistic for how you bank?
REBOLST shows the actual APY applicable to standard deposits, with notes on tiers, caps, and promotional periods. The goal is to show you what you'll actually earn — not just what sounds best in an advertisement.