Analysis checking is a type of business bank deposit product that helps minimize fees for companies that write large amounts of checks every month or deposit large amounts of checks into their accounts. The details of analysis checking varies from bank to bank, but there are some general similarities between these types of accounts.
Background
Most banks allow businesses to deposit and write a certain amount of checks every month, then charge fees for each check written or deposited after that limit is reached. Banks may also charge businesses for each deposit made in an overnight depository or for each roll of change given to the business.
Identification
With an analysis checking account, banks give businesses an earning credit, equal to a certain percentage of the balance in the account, In some cases, the percentage is a fixed number disclosed when the business opens the account, while in others, the rate fluctuates based on some type of standard such as the prime rate of interest, a figure established by the Federal Reserve.
Effects
If a business's earnings credit is more than all of the fees incurred on the account, the business does not pay any fees for item processing, change orders or night drop deposits for the month. If the earnings credit is less than the total amount of the fees, the difference between the two is deducted from the business's checking account.
Features
Banks provide companies with an analysis statement every month in addition to their regular checking account statement, detailing what fees were charged, how much the credit was and what amount (if any) was deducted from the account.
Considerations
Analysis checking accounts are typically not beneficial for businesses that do not maintain large balances in their checking accounts or who do not deposit or write a lot of checks. Bankers typically have worksheets that help businesses decide whether or not analysis is beneficial for their particular circumstances.
References
- People's Bank: Analysis Checking
- RBC Bank: Analysis Checking
- Federal Deposit Insurance Corporation. "Weekly National Rates and Rate Caps - Weekly Update." Accessed May 6, 2020.
- Bankrate. "Checking fees rise to record highs in 2012." Accessed May 8, 2020.
- Bankrate. "Best Checking Accounts of May 2020." Accessed May 8, 2020.
- Federal Reserve Bank of New York. "How Effective Is Lifeline Banking in Assisting the ‘Unbanked’?," Pages 1-2. Accessed May 8, 2020.
- Bankrate. "Survey: Rising ATM and overdraft fees leave consumers paying much more than they did 20 years ago." Accessed May 8, 2020.
- Federal Deposit Insurance Corporation. "Deposit Insurance FAQs." Accessed May 8, 2020.
- National Credit Union Administration. "Bank to Credit Union Conversions." Accessed May 8, 2020.
- National Credit Union Administration. "Share Insurance Fund Overview." Accessed May 8, 2020.
Writer Bio
Faith Davies has been writing professionally since 1996, contributing to various websites. She holds an LAH insurance license in the state of Pennsylvania and has experience as a bank branch manager and lending officer. Davies graduated cum laude from the University of Pittsburgh with a Bachelor of Arts in art history.