Earnings Allowance

DEFINITION of 'Earnings Allowance'

Calculation on the net funds available in a checking account and the credit amount can be used to offset all or a portion of monthly service charges. The rate for the earnings allowance is set at the bank's discretion.




BREAKING DOWN 'Earnings Allowance'

The earnings allowance, or ECR, is not an account by itself. The rate is variable as it is usually based on some percentage of the 13-week T-Bill rate.




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