Financial Consumer Agency of Canada
www.fcac-acfc.gc.ca
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Savings Accounts
Calculation method C1
With this method, the financial institution applies the highest interest rate to the whole balance.
Example 1
You have $1,200 in your account. This is the account description:
- Tier 1: 1% - $0 to $1,000
- Tier 2: 2% - $1,001 and up
Interest is calculated as follows:
- Balance: $1,200
- Interest: 2% applied on $1,200
- Total balance with interest compounded after one year: $1,224
Therefore, with method C1, if you have $1,200 in your account, a 2 percent interest rate is applied to the entire amount of your balance.
