Posted March, 26 2020

HMBradley's Savings Tiers: Explained

At HMBradley, we think banking should be a personalized experience, not the same one-size-fits-all approach you get from other banks. You don’t earn the same salary or spend nearly as much on model trains as your Uncle Joe, so why is your bank paying you both the same interest rate? 

That’s why we created Savings Tiers – our way of rewarding customers with different types of saving behaviors. Each of our four Savings Tiers represents the amount a customer saves every calendar quarter and rewards them with a corresponding rate, between 0.50 to 3.00% APY1

What are the different Savings Tiers?

HMBradley customers who qualify2 fall into one of four Savings Tiers based on the percentage of their deposits they save in the previous quarter. In order to qualify for a Tier and earn interest, you must receive at least one direct deposit each month and save at least 5% of your quarterly deposits.

  • Customers who save 20% or more of their quarterly deposits will earn 3.00% APY in Tier 1.
  • Customers who save between 15% and 20% quarterly will earn 2.00% APY in Tier 2. 
  • Customers who save between 10% and 15% quarterly will earn 1.00% APY. All new customers begin in Tier 3.
  • Customers who save between 5% and 10% quarterly will earn 0.50% APY.
  • Saving below 5% will result in no earned interest.

How do we calculate your Savings Tier?

The more you save with HMBradley, the more you can earn. Each quarter, we compare the money you deposited to your HMBradley account with all of the money you spent or transferred out of your account. The percentage that remains determines your Savings Tier and the associated interest rate you’ll enjoy3 throughout the following quarter.

For example, let’s say that in one quarter, you deposit $20,000. This amount could include direct deposits from your employer (or other sources), plus any other deposits such as transfers from another bank. In that same quarter, you spend $18,000 – or just transferred it out of your account.

At the end of the quarter, you had net savings of $2,000, which is 10% of your $20,000 in deposits. This puts you in Tier 3 and at the start of the following quarter, you will start earning 1.00% APY for the next three months.

A year with Savings Tiers

Let’s take a deeper dive into what a year of Savings Tiers could look like for our customer, Jane (Keep in mind that this is a simplified example for illustrative purposes only. Your situation may differ from our friend Jane – because we made Jane up).

Quarter 1 (January 1 - March 31)

It’s a new year, and Jane’s new year’s resolution is to get her finances in order. She’s currently an HMBradley customer, but until now, she hasn’t prioritized her savings as much as she would like. She’s starting the year in Tier 3, earning 1.00% APY.

Jane has a steady take home pay of $54,000 per year, meaning she directly deposits $13,500 into her account each quarter. Because she wants to improve her Savings Tier next quarter, she does her best to stick to a budget of $3,800 per month in expenses, leaving $700 per month in savings. At the end of the quarter, Jane has saved $2,100, which amounts to 16% of her $13,500 deposits. According to our handy Savings Tier Table above, this means she will jump to Tier 2 on April 1 (the start of Quarter 2), and start earning 2.00% APY.

Quarter 2 (April 1 to June 30)

Jane starts off her second quarter with some big news: she gets a raise! And like any smart saver, she stashes that extra income away. Her expenses creep up a bit, but she still saves an impressive $3,000 this quarter bringing her savings percentage to 20%. Nice work, Jane! As the quarter wraps up, she has secured the coveted Tier 1 (3.00% APY) for the next three months.

Quarter 3 (July 1 to September 30)

Riding high off her newly minted Tier 1 status, Jane feels that nothing can stop her from reaching her financial goals...until she decides it’s time for a new couch. This extra expense takes a slight toll on her Tier 1 savings rate, and Jane slips down to 9% saved by the end of the quarter. She’ll still be earning 0.50% APY come October 1, but she should be able to step her savings game up and get back to Tier 1 in time for the new year.

Quarter 4 (October 1 to December 31)

Jane is determined to finish the year strong and prioritizes her savings goals. Her budget is back on track during the final quarter of the year, and she’s able to save 20% of her deposits once again. She has finished the year strong and will kick off her new year earning 3.00% APY.

Even with some notable ups and downs throughout her year, Jane had a great year of saving and interest earned with HMBradley. She earned $121 in interest on her deposits, which is impressive compared to what she would have earned at some of the big banks like Chase (< $1)4 or Bank of America (<$3)5. Even compared to a high-yield savings account earning 1.60% APY, Jane made more in interest with HMBradley.

We know that everyone’s financial situation is different and ever-changing, which is why we believe banking should be personalized, not one-size-fits-all.You and Jane probably have different incomes, saving priorities, and spending habits, and HMBradley has the tools to help you and each of our customers take control of their personal finances. Each customer is unique, and we are committed to helping you unlock your specific potential to earn more interest on the money you save.

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All accounts and funds are held at Hatch Bank, Member FDIC and are insured up to $250,000 per depositor.

1 Interest is earned on account balances up to $100,000. Account funds over $100,000 will not earn interest. Terms and conditions apply.

2 Terms and conditions apply. See qualifying terms here.

3 Saving less than 5% of your quarterly deposits will result in no Savings Tier and no interest paid. You must save at least 5% of your quarterly deposits to qualify for a Savings Tier.

4 Chase Bank’s APY for Savings Accounts was listed at 0.01% APY (on 03/12/2020). The above example of earned interest was calculated using the monthly compounding method at the advertised interest rates applied to the same balances as the calculation of interest earned with HMBradley.

5 Bank of America’s APY for Savings Accounts was listed at 0.03% APY (on 03/12/2020). The above example of earned interest was calculated using the monthly compounding method at the advertised interest rates applied to the same balances as the calculation of interest earned with HMBradley.