Earnings Credit Rate (ECR)

Written by:
Image
Paul Tracy

Paul has been a respected figure in the financial markets for more than two decades.

Prior to starting InvestingAnswers, Paul founded and managed one of the most influential investment research firms in America, with more than 2 million monthly readers. While there, Paul authored and edited thousands of financial research briefs, was published on Nasdaq. com, Yahoo Finance, and dozens of other prominent media outlets, and appeared as a guest expert at prominent radio shows and i...

View all posts
Updated January 16, 2021

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 deposits with Bank ABC. Bank ABC normally charges Company XYZ and the rest of its customers $0.01 per deposit, $0.01 per check, 3% for change orders (converting large amounts of cash to coins), and several flat monthly service fees.

However, because Company XYZ has more than $700,000 in combined deposits with Bank ABC, the bank offers it an earnings credit 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 a lot of money 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.

Ask an Expert about Earnings Credit Rate (ECR)
At InvestingAnswers, all of our content is verified for accuracy by Paul Tracy and our team of certified financial experts. We pride ourselves on quality, research, and transparency, and we value your feedback. Below you'll find answers to some of the most common reader questions about Earnings Credit Rate (ECR).
Be the first to ask a question

If you have a question about Earnings Credit Rate (ECR), then please ask Paul.

Ask a question

Paul has been a respected figure in the financial markets for more than two decades. Prior to starting InvestingAnswers, Paul founded and managed one of the most influential investment research firms in America, with more than 2 million monthly readers.

If you have a question about Earnings Credit Rate (ECR), then please ask Paul.

Ask a question Read more from Paul

Read this next

Paul Tracy - profile
Ask an Expert about Earnings Credit Rate (ECR)

By submitting this form you agree with our Privacy Policy

Share
close
Don't Know a Financial Term?
Search our library of 4,000+ terms