Analyzed Business Checking: A Practical Guide for Businesses

For businesses that handle large balances and frequent transactions, an analyzed business checking account can turn routine banking into a cost-saving tool. Rather than paying flat maintenance or transaction fees, your account earns credits based on your collected balance—called an earnings credit rate (ECR)—which can offset eligible service charges.

In practice, that means the more you maintain in your account, the more you can reduce—or even eliminate—monthly fees.

Unlike a traditional business checking account, where fees are fixed, regardless of balance, analyzed accounts offer flexibility. Companies using treasury or cash management services often rely on them to simplify banking while keeping costs under control.

In this guide, we’ll break down how analyzed business checking works, who can benefit most from it, the key pros and cons, and how to compare accounts to find the best fit for your business.

How It Works and Understanding Earnings Credits

Here’s how the process typically works:

1. Your business checking balance is tracked throughout the statement cycle, usually based on your collected (available) funds rather than your ledger balance.
2. The bank calculates an earnings credit based on your average collected balance and its current ECR, which can change depending on market conditions.
3. Those credits are then applied to offset eligible fees—helping your account essentially “pay for itself.”

For example, if your average collected balance is $100,000 and your ECR is 1.5%, you’d earn about $125 in credits that month. If your total service charges were $150, you’d only pay the $25 difference.

Common fees that can be offset include:

• Account maintenance fees: Routine service charges for keeping your business account active.
• Wire transfer costs: Fees for sending or receiving domestic and international payments.
• ACH transactions: Payments or deposits made electronically, such as payroll or vendor payments.

Fees that cannot be offset may include overdraft charges, loan interest, or business credit card fees.

In short, your balance works harder for your business by reducing the cost of managing it.

Who Should Use an Analyzed Business Checking Account?

An analyzed checking account is ideal for:

• Larger businesses maintaining high balances: Companies with steady cash reserves can take full advantage of earnings credits each month.
• Businesses handling frequent transactions: Those processing large volumes of ACH transfers, wires, and deposits benefit from offsetting transaction-based fees.
• Organizations using treasury or merchant services: If your business already uses merchant services, cash management, or payroll tools, an analyzed account can make tracking and managing these fees simpler.

For smaller companies or businesses with more modest balances, other checking account types, such as business interest checking, may be a better fit. This account is simpler to manage, has lower minimum balance requirements, and offers a straightforward way to handle everyday transactions without the complexity of an analyzed account.

Benefits and Drawbacks

Benefits

• Reduced fees: Offset many recurring banking charges by keeping higher balances and taking advantage of earnings credits. Over time, this can significantly lower the cost of business banking.
• Transparency: Your monthly account analysis report clearly breaks down balances, fees, and credits, giving you greater insight into how your money moves.
• Scalability: As your business grows, analyzed accounts scale with you—higher balances mean greater potential credits and easier integration with additional services.
• Access to premium services: Analyzed accounts often pair with such tools as cash management, merchant services, business online banking, and mobile banking, allowing your company to operate more efficiently.

Drawbacks

• Higher balance requirements: Typically best for larger businesses with the capacity to maintain six-figure balances.
• Complex statements: Monthly analysis statements can include detailed line items and calculations that take time to understand.
• Partial offset: Not all fees qualify for earnings credits, so some charges may still apply.
• Opportunity cost: Funds tied up in checking may earn less than they would in a money market or investment account.

Comparing Accounts Between Banks and Alternatives

When comparing analyzed accounts across banks, pay close attention to:

• Earnings credit rate (ECR): Even small differences can add up significantly over time.
• Balance requirements: Confirm whether the ECR applies to your total balance or collected balance.
• Pooling rules: Some banks allow multiple accounts to be grouped together for analysis, increasing your credit potential.
• Additional digital banking tools: Features such as business online banking, mobile banking, and business bill pay can enhance convenience.
• Support and service: Having a dedicated relationship with your bank’s team members can make navigating account analysis easier.

If your business doesn’t yet have the balance or transaction volume to justify an analyzed account, consider some other everyday alternatives, such as:

• Standard business checking: Great for daily operations with straightforward fee structures.
• Business interest checking: Let your balance earn interest while maintaining flexibility.
• Savings or money market accounts: Useful for setting aside excess funds while still earning returns.

Frequently Asked Questions

What is an analyzed business checking account?

It’s a business account that uses earnings credits to offset eligible fees, rewarding businesses that keep higher balances.

How does it work?

Your average collected balance earns credits at a set rate, which are applied to reduce monthly service charges.

What is an earnings credit, and how is it calculated?

An earnings credit is the dollar value your balance earns based on the ECR—for example, $100,000 × 1.5% = $125 in credits

(numbers are for illustration purposes only)

Which fees can be offset?

Maintenance, deposit, and transaction fees can typically be offset. Overdraft, loan, and business credit card fees usually cannot.

What’s the difference between analyzed and non-analyzed accounts?

Analyzed accounts use balance-based credits to offset costs; non-analyzed accounts charge fixed fees regardless of balance.

What’s an analyzed bank statement or analysis charge?

This is the detailed monthly statement showing balances, credits, and service fees assessed during the cycle.

Is Analyzed Business Checking Right for You?

If your business keeps substantial balances and processes frequent transactions, an analyzed business checking account can help you manage fees more efficiently while providing a clearer, real-time view of your banking activity.

Cathay Bank’s commercial analysis and business checking solutions are designed to help you manage cash flow, streamline operations, and build a foundation for long-term success.

Not sure where to start? Our team members can help you explore which account best fits your needs and goals.

Contact Cathay for your banking needs.