Earnings Credit Rate

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Earnings Credit Rate

Also called an ECR. The interest rate a bank pays on customer deposits. Rather than being applied to the deposit directly, ECRs are used to reduce the fees the customers pay for other banking services. For example, if a bank is paying a 0.05% ECR on a $10,000 deposit, the depositor earns a $5 reduction in his/her other fees. An ECR is usually connected to a Treasury bill rate.
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Gross analyzed earnings credit rates (ECR), account balances, FDIC insurance charges, and indices
Informa Research Services' researchers are experts in all financial products and services including Earnings Credit Rate (ECR) and Analyzed Checking Fees.
Bank deposits are attractive because companies are uncertain about future changes in money market fund regulation, many banks allow corporate customers to defray service fees through Earnings Credits on cash holdings, and the Earnings Credit Rates (ECR's) on those holdings are slightly higher than prevailing interest rates on similar short term investments.
Banks had been offering corporate customers attractive earnings credit rates to encourage deposits, but those earnings credits have come down or disappeared altogether, leaving prime funds among the few remaining ways to capture additional return.
Service charges on deposit accounts were flat, with higher account analysis fees related to lower earnings credit rates offset by lower overdraft fees on lower deposit balances.
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