If a deposit account is offered with an intro rate, for example 3.93% for the first three months and becomes variable after the intro period, how does the APY need to be disclosed on account opening disclosures and advertising?

Can it be disclosed as two separate APY figures, one for the intro at 4.00% and one for the current non-intro rate at 1.00%, or does it need to be disclosed as one APY for the first year taking into account the different rates?

What if the account is also a tiered account, with different rates for different deposit amounts? Does it list the intro APY and then the APY associated with current variable rate for each tier? Or does it need to list one APY for each tier that takes into account both the intro and non-intro rates?

Review Regulation DD's Appendix A, particularly sections C and D.

In Section C, we see the following, which addresses your question about a variable rate account with an introductory rate period:

"Variable-rate accounts with an introductory premium (or discount) rate must be calculated like a stepped-rate account. Thus, an institution shall assume that: (1) The introductory interest rate is in effect for the length of time provided for in the deposit contract; and (2) the variable interest rate that would have been in effect when the account is opened or advertised (but for the introductory rate) is in effect for the remainder of the year. If the variable rate is tied to an index, the index-based rate in effect at the time of disclosure must be used for the remainder of the year. If the rate is not tied to an index, the rate in effect for existing consumers holding the same account (who are not receiving the introductory interest rate) must be used for the remainder of the year.

"For example, if an institution offers an account on which it pays a 7% interest rate, compounded daily, for the first three months (which, for example, contain 91 days), while the variable interest rate that would have been in effect when the account was opened was 5%, the total interest for a 365-day year for a $1,000 deposit is $56.52 (based on 91 days at 7% followed by 274 days at 5%). Using the simple formula, the annual percentage yield is 5.65%:

"APY = 100 (56.52/1,000)

"APY = 5.65%"

In Section D, we find the answer to your second question: You must disclose the APY for each tier.

"For accounts in which two or more interest rates paid on the account are applicable to specified balance levels, the institution must calculate the annual percentage yield in accordance with the method described below that it uses to calculate interest. In all cases, an annual percentage yield (or a range of annual percentage yields, if appropriate) must be disclosed for each balance tier."

Read further in Section D for guidance on determining the APY or APY range depending on whether the bank uses "tiering method A" or "tiering method B."