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.