This is how Achieva Financial justifies NOT raising they're HISA interest rate | Achieva Financial | Discussion forum

Here’s how a Higher Interest Rate could mean a Lower Return

by Achieva Financial, September 11, 2017

"At first glance, you may think a higher interest rate on a Savings Account would generate the best return for your savings. But this is not always the case. In fact, you could easily receive a lower return on a higher interest rate.

It all depends on how the Savings Account is set-up to calculate your interest.

Some Savings Accounts calculate interest based on the minimum monthly balance held in the account each month end and will only pay interest annually. While some institutions may call this “Regular Savings”, the reality is this type of savings account operates more like a redeemable 1 year GIC. As a an account holder, your interest is calculated based on the lowest level held in your account each month-end, even if it had a higher balance for the 29 days leading-up to the last day of the month. Worse than that, these type of accounts will not maximize your savings, as they do not flow the interest back into your savings to compound each month.

For example, if you maintained a $50,000 balance for 29 days out of the month, and then a $100 balance for the remaining two days, the interest is calculated for the entire month is based only on the $100 balance.

Here at Achieva, we believe you should be maximizing your savings and having direct access to the interest you earn each month. Our Daily Savings Account offers a 1.70% interest rate that is calculated on your daily closing balance, and paid monthly. This type of calculation offers you the highest return available for your savings, while also allowing your interest to compound each and every month.

When it comes to savings, it is always worth taking a closer look to how interest is being credited to your account."