How much savings do you have?
What are the conditions you are able to fulfil to earn a higher interest rate?
A bank may offer an interest rate of “up to 8.0% p.a.”, but this 8.00% p.a. rate is given only for balances above a certain level of deposits, say $50,000.
For example, if you have deposits of S$70,000, you may be earning a lower interest rate for deposits of below $50,000. The higher interest rate of 8.0% is applied only to the $20,000 of deposits above $50,000.
Your total interest earned is calculated by adding the interest received across different tiers. The effective interest rate is the average interest rate you would get by dividing the total interest earned by your average balances.