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• Method to evaluate allowable differential settlement for open top tank is proposed. • The proposed method is based on GMNA of 21 different tank models. • GMNA is performed to obtain the limiting settlement value for a tank geometry. • Proposed method is validated by randomly selected tanks and settlement profiles. • The drawback of the existing API 653 method-1 are highlighted. A method for evaluating the mechanical integrity of open-top cylindrical storage tanks subjected to a differential settlement is given. The settlement profile underneath the bottom circumference of the tank shell can be transformed into different harmonic components using the Fourier transformation. The existing method in American Petroleum Institute's standard API 653, which is currently used by the industry in North America, does not differentiate the effect of different harmonic components. Nevertheless, the proposed method evaluates a cumulative damage factor by considering the effects of first five harmonic components individually. The paper further discusses other limitations of the existing method in API 653 document. Numerous finite element analysis (FEA) simulations are conducted to formulate and validate the proposed method by employing geometric nonlinear algorithm with nonlinear plastic material properties (GMNA) in ABAQUS finite element software. The trend for limiting settlement values with respect to different harmonic components under consideration and different tank geometries are discussed. The proposed method is validated by performing FEA using four actual settlement data profiles on different tank geometries. Lastly, the comparison is drawn between the FEA results, the existing API 653 method and the proposed method. The results of the allowable settlement indicate that the existing method is not consistent with the FEA findings. For some of the actual settlement data, the existing method results in overly conservative values and for others it gives non-conservative values. Thus, the existing method may not capture the true behavior of tanks under settlement and needs modifications. The results of allowable settlement from the proposed method are found to be consistent with the FEA results for all different settlement data and tank geometries. Therefore, it is recommended that the new method is used instead of the existing method. [ABSTRACT FROM AUTHOR]