What type of account allows for various interest rates based on customer balance?

A tiered rate account is designed to offer different interest rates based on the balance maintained in the account. This structure incentivizes customers to keep higher balances, as they can earn higher interest rates as their balance reaches certain thresholds. For example, a tiered rate account may offer one interest rate for balances up to a specific amount, another rate for balances above that amount, and potentially additional rates for even higher balances. This encourages savings and rewards customers for maintaining larger deposits, making it an appealing choice for individuals seeking to maximize their interest earnings.

In contrast, a fixed-rate account provides a set interest rate for the duration of the account, regardless of the balance, while a variable rate account typically fluctuates based on market conditions, and a stepped rate account may offer an interest increase after certain time frames or conditions, but not specifically based on balance tiers like the tiered rate account does. Thus, tiered rate accounts are specifically designed to reward higher balances with better interest rates, making them advantageous for customers looking to increase their earnings through their deposits.