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It's even in the CFPB documentation. As long as the banks accurately disclose the tiers, then do what they promised, and don't discriminate against protected classes (like race, sex, age, etc), this structure is all pretty well-documented as being legal.
Modern tiered‑rate accounts
In the U.S., deposit interest rates were heavily regulated under Regulation Q from the 1930s until the 1980s, but even then banks distinguished between types and sizes of deposits (e.g., large denomination certificates of deposit for institutional or wealthy customers) and paid different rates on them.
Once those caps were dismantled in the late 1970s–1980s, banks quickly formalized what had been informal practice into advertised “tiered‑rate accounts,” where specific balance bands earned different rates; today this structure is standard enough that regulators and legal glossaries treat “tiered‑rate account” as a defined product type.
In the U.S., deposit interest rates were heavily regulated under Regulation Q from the 1930s until the 1980s, but even then banks distinguished between types and sizes of deposits (e.g., large denomination certificates of deposit for institutional or wealthy customers) and paid different rates on them.
Once those caps were dismantled in the late 1970s–1980s, banks quickly formalized what had been informal practice into advertised “tiered‑rate accounts,” where specific balance bands earned different rates; today this structure is standard enough that regulators and legal glossaries treat “tiered‑rate account” as a defined product type.
I agree with you that's it's pretty bullshit, but so many things are when it comes to money and how everything is set up for the rich to get richer
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