Earnings Credit Rate (ECR)
What is an Earnings Credit Rate (ECR)?
An earnings credit rate (ECR) is a discount a bank gives a depositor on the depositor's bank fees.
How Does an Earnings Credit Rate (ECR) Work?
Let's say Company XYZ has $950,000 in combined
However, because Company XYZ has more than $700,000 in combined deposits with Bank ABC, the bank offers it an that offsets those bank charges. The bank sets the rate, which is often based on the U.S. Treasury bill rate.
Why Does an Earnings Credit Rate (ECR) Matter?
A company can save aof with a bank that offers an ECR. The bank also benefits from this in that it encourages the customer to keep larger balances in its accounts.