Does your business have a high volume of checks written or deposited each month? Do you carry at least a modest deposit balance in your business account? If so, you may be paying unnecessary fees to your bank that could be avoided by switching to an analyzed checking account. Many owners of small to medium-sized businesses lean toward the less-complicated fee-based accounts, but an analyzed account could save your company money on banking fees every month, based on the average collected deposit balances.
A strong relationship with your banker should make choosing the right account easy, but here are some basic facts about the differences between the two types of accounts.
Non analyzed fee-based accounts are typically well-suited for small businesses. With this type of account, your bank will usually require a minimum balance to waive a monthly service charge. In addition, they may limit the number of checks written and deposited each month and charge a per-check or per-deposited item fee if you exceed the established limits. Additional fees may be charged for currency or coin ordering, stop payments, or incoming wires. Specialty services, sometimes referred to as Cash Management or Treasury Management services, may not be available without an analyzed checking account at some banks. These services could include services such as Remote Deposit Capture, Positive Pay, Lockbox, and/or Automated Clearing House, (ACH) origination.
An analyzed checking account may be the best solution for your business. Here’s what you can count on from most analyzed checking accounts:
- No limit on the number of checks written or deposited.
- An earnings credit allowance is calculated, based on 90% of the average collected balance in the account and the bank’s current earnings credit rate. For example, if the average collected balance in the account is $100,000, the earnings credit rate would be applied to $90,000. With a 1% earnings credit rate and 30 days in the month, the resulting earnings credit allowance would be $73.97. If the earnings credit is greater than or equal to the total amount of fees incurred on the account, the business does not pay any fees. In the example above, if the monthly fees totaled $50, then the $73.97 would offset the fees and the business would not pay a monthly fee.
- 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. In the example above, if the monthly fees totaled $100, then $73.97 would be deducted from that amount and the business would only pay $26.03 in monthly fees.
With an analyzed account, you can also access a full array of Cash Management products and services to assist you in managing and protecting your company finances. Plus, you could minimize the fees you pay every month. Talk to your banker about the differences between analyzed and fee-based business checking accounts to see which is best for you.