With growth comes complexity. The more your business expands, the more multi-faceted it becomes. Suddenly you’re navigating more systems, perspectives, and choices than ever before.
At ICCU, we’re believers in facing that complexity head on. With the right tools and guidance, you can master the challenges of business banking with ease.
Today we’re not just showing you the ins and outs of a Business Analyzed Checking Account, but how to tell if it’s the right account for you and what options to pursue if you’re looking for a different fit.
Analyzed Checking at a Glance
A Business Analyzed Checking Account works by giving your company earnings credits based on its account balance, which you can then use to offset standard banking fees. It also comes with a suite of business services like Business Sweep Accounts, Preferred Pay (ACH Origination), Positive Pay fraud detection, and Remote Deposit Capture.
An analyzed checking account is ideal for businesses with large deposits and high transaction volumes. Companies that need additional services can also benefit.
An analyzed checking account is less effective for businesses that don’t have complex banking needs. If your company doesn’t maintain a large account balance or process many transactions, it might benefit from a simpler account.
If you’re interested in alternatives to analyzed accounts, try a Business Money Market Account instead, which offers tiered interest* on daily balances over $2,500.
When you work with ICCU, you can expect a dedicated Treasury Management Officer to support your company with all its banking needs, providing the expertise and resources it needs to thrive.
What Is a Business Analyzed Checking Account?
Most traditional bank accounts come with fees, whether it’s for monthly maintenance, transactions, cash deposits, or what have you. To offset those fees, your credit union or bank might give you a certain number of free transactions and deposits.
If you’re a larger company, though, those freebies likely won’t last you long. 200 free transactions, for example, might work just fine for a smaller business but won’t last the week for a bigger one. As soon as they run out, you’re stuck paying a fee on every single transaction, deposit, etc. your business makes.
Enter the analyzed checking account (also known as analysis checking). Unlike a traditional account, an analyzed checking offsets your fees with earnings credits. If your company processes a lot of transactions and maintains a high account balance, those credits will likely cover more fees than the freebies offered on normal accounts.
The higher your business’s average collected account balance is, the more earnings credits your account will receive every month.
How are Earnings Credits Calculated?
The exact calculation varies by where you bank, and no matter where you go, it tends to get complicated. Generally, the equation includes your average collected balance, which is potentially different from your actual balance; an earnings credit rate (ECR), which varies depending on the business and financial institution; and the number of days in your billing cycle.
Because the ECR varies, we recommend meeting with a Treasury Management Officer to see specifics on how an analyzed checking would work for your business. They’ll walk you through your business’s specific rate, plus what to expect as you open your account and run business through an analyzed checking.
Keep in mind that after signing up for an account, you’ll receive an analysis statement separate from your account statements that will itemize your company’s earnings credits and account fees.
What Happens if My Business Accrues Extra Earnings Credits?
It depends on the financial institution, but most don’t transfer credits from month to month. Generally, your earnings credits reset to 0 at the beginning of the month.
If your business account balance stays relatively consistent, that shouldn’t be much of a problem since you’ll still earn consistent credits. If your business’s account balance varies, though, an analyzed checking could mean more fees during months when your balance is lower and fewer fees during high-balance months.
Can I Make Money from My Earnings Credits?
Earnings credits can only be applied to fees, so you won’t be able to cash out extra credits.
Because analyzed accounts are primarily focused on eliminating fees, they don’t feature an interest rate either. If you’re looking for something that earns interest*, see our Business Money Market Checking and Money Market Savings accounts.
Pros and Cons of Business Analyzed Checking Accounts
Like many banking products, an analyzed checking account might be the perfect fit for some and the wrong choice for others. An ICCU Treasury Management Officer can guide you through this and other accounts to see which is best for your business’s needs.
Pros
- Your business will potentially face fewer monthly fees, particularly if it maintains a high account balance or makes a lot of transactions.
- Analyzed checking accounts come with a host of additional banking services, such as Business Sweep Accounts, Preferred Pay (ACH Origination), Positive Pay fraud detection, and Remote Deposit Capture.
- When you open a business account with ICCU, you get access to a dedicated Treasury Management Officer who will help you customize your accounts and ICCU services to best fit your business.
Cons
- Your business will potentially face more fees if it keeps a low account balance or doesn’t regularly accrue fees from transactions, deposits, etc.
- An analyzed checking doesn’t come with free deposits or transactions.
- This account doesn’t earn interest.
Looking for a Different Fit?
If a Business Analyzed Checking Account isn’t exactly your cup of tea, your company has options:
Business Money Market Checking: Perfect for businesses that experience high transaction volumes, maintains a high account balance, and wants to earn interest.
Small Business Checking: Perfect for businesses who want free benefits and low-complexity banking, particularly if you don’t anticipate more than 200 monthly transactions.
Business Certificates of Deposit: Perfect for businesses who want to save money while earning fixed interest* with low risk—and don’t need to access that savings for at least three months.
At the end of the day, only your business knows what’s the right fit. But no matter what ICCU account you choose, rest assured that our Treasury Management team will be there to provide financial expertise and support, optimizing your banking suite with what your business needs most.
*Interest rate and annual percentage yield are variable. May change at any time.
