Financial Consumer Agency of Canada
www.fcac-acfc.gc.ca
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Savings Accounts
Calculation method C1/C2
With this method, the financial institution applies a combination of both C1 and C2 calculation methods depending on the tier. For example, method C1 may apply to the first two tiers and method C2 may apply to the third tier.
Example 3
You have $5,200 in your account. This is the account description:
- [C1] Tier 1: 1% - $0 to $1,000
- [C1] Tier 2: 2% - $1,001 to $5,000
- [C2] Tier 3: 3% - $5,001 and up
Interest is calculated as follows:
- Balance: $5,200
- Interest for Tier 1 and Tier 2: 2% applied on $5,000
- Interest for Tier 3: 3% applied on $200
- Total balance with interest compounded after one year: $5,307
The interest calculation does not include Tier 1 at 1 percent because it uses the highest interest rate up to $5,000, which is 2 percent.
Therefore, with method C1/C2, if you have $5,200 in your account, 2 percent is applied to your balance from $0 to $5,000 and 3 percent is applied to your balance between $5,001 and $5,200.
