Earnings Allowance

AAA

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.




INVESTOPEDIA EXPLAINS '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.




RELATED TERMS
  1. Earnings Credit Rate - ECR

    A daily calculation of interest paid on idle funds that reduce ...
  2. Commercial Bank

    A financial institution that provides services, such as accepting ...
  3. Interest

    1. The charge for the privilege of borrowing money, typically ...
  4. Interest Rate

    The amount charged, expressed as a percentage of principal, by ...
  5. Variable Interest Rate

    An interest rate on a loan or security that fluctuates over time, ...
  6. 10-Year Treasury Note

    A debt obligation issued by the United States government that ...
RELATED FAQS
  1. What are some of the well-known no-load funds?

    The capital adequacy ratio promotes stability and efficiency of worldwide financial systems and banks. The capital to risk-weighted ... Read Full Answer >>
  2. What is the Activities of Daily Living (ADL) hierarchy scale?

    While there are some important similarities between a post-dated check and a banker's acceptance, each is a different financial ... Read Full Answer >>
  3. What are the differences between preference shares and bonds?

    Establishing a checking account with a bank requires more than an initial deposit or verification of a customer's identity. ... Read Full Answer >>
  4. How do you calculate payback period using Excel?

    Each financial institution offers similar products for its banking customers, including savings accounts, certificates of ... Read Full Answer >>
  5. What formula can I use to calculate interest on interest?

    Use the compound interest formula to determine the amount of accumulated interest on the principal amount invested or borrowed. ... Read Full Answer >>
  6. What happens when my bank account is debited?

    When your bank account is debited, it means money is taken out of the account. The opposite of a debit is a credit, in which ... Read Full Answer >>
Related Articles
  1. Credit & Loans

    How Interest Rate Cuts Affect Consumers

    Traders rejoice when the Fed drops the rate, but is it good news for all? Find out here.
  2. Retirement

    Should You Put Your Faith In A Trust?

    Many institutions want a piece of your portfolio, but trusts can provide a one-stop shop.
  3. Options & Futures

    How To Break Up With Your Bank

    Whether you're moving or have just found a better no-fee plan, find out how to switch banks with ease.
  4. Personal Finance

    Cut Your Bank Fees

    Find out how to get the bank to pay you for using their services, not the other way around.
  5. Savings

    Top Premium Checking Accounts of 2015

    Which banks offer the best deals for premium checking accounts – and what do you have to do to qualify for one?
  6. Economics

    Explaining Risk-Weighted Assets

    Risk-weighted assets is a banking term that refers to a method of measuring the risk inherent in a bank’s assets, which is typically its loan portfolio.
  7. Personal Finance

    5 Financial Tools You Can Throw Out The Window

    Bank deposit slip: what's that? Everyday tools of our financial life that went from indispensable to obsolete.
  8. Savings

    Understanding Savings Accounts

    A deposit account held at a bank or other financial institution that provides principal security and a modest interest rate.
  9. Personal Finance

    How The SWIFT System Works

    SWIFT has become the global standard for processing instructions and messages for payment and securities trade transactions. Investopedia explains what SWIFT is, how it works, how it makes money, ...
  10. Savings

    Review: Discover Checking Account

    Will having a Discover checking account save you money? It will save you fees.

You May Also Like

Hot Definitions
  1. Covered Call

    An options strategy whereby an investor holds a long position in an asset and writes (sells) call options on that same asset ...
  2. Butterfly Spread

    A neutral option strategy combining bull and bear spreads. Butterfly spreads use four option contracts with the same expiration ...
  3. Unlevered Beta

    A type of metric that compares the risk of an unlevered company to the risk of the market. The unlevered beta is the beta ...
  4. Moving Average - MA

    A widely used indicator in technical analysis that helps smooth out price action by filtering out the “noise” from random ...
  5. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  6. Productivity

    An economic measure of output per unit of input. Inputs include labor and capital, while output is typically measured in ...
Trading Center