What Is a Commercial Account?

A commercial account is any type of bank account that is used by corporations and businesses. A commercial account is usually a checking or other type of 澳洲幸运5官方开奖结果体彩网:demand deposit account, meani🐻ng the money can be withdrawn at any time.

澳洲幸运5官方开奖结果体彩网:Regulation Q of the U.S. Federal Reserve prohibits banks from paying interest on this type of account. Banks instead pay earnings credits, which they base upon👍 the average account balance.

How Commercial Accounts Work

Commercial accounts typically have higher monthly 澳洲幸运5官方开奖结果体彩网:service charges and other related fees than retail ac🌱co💦unts. Retail accounts are part of consumer banking or personal banking and are serviced online or at a local branch. Companies that have commercial banking accounts usually have a business representative assigned to them. Some commercial banks have specific relationship managers that service large corporations, midsize businesses, and small businesses separately.

澳洲幸运5官方开奖结果体彩网:Commercial banks are banks that offer services, such as accounts and credit products, to businesses and consumers. These banks tend to have expanded product and service offerings that cater to small-to-midsize businesses and corporations. Most often commercial banks will have 澳洲幸运5官方开奖结果体彩网:night depositories that allow businesses to depos♏it funds oꦕutside of normal business hours.

Although a commercial account typically refers to a specific bank account, it can also mean a commercial account relationship, which encomp🧸asses all of the products and services that a business is involved🌌 with at that bank.

Commercial Account Products and Services

Commercial or corporate 澳洲幸运5官方开奖结果体彩网:banking products and 🦂services include🍰 but are not limited to the following:

• Loans and other credit products, such as business credit cards and 澳洲幸运5官方开奖结果体彩网:working capital lines of credit that allow companies access to funds when needed
• Treasury and cash management services, which include overnight and short-term cash investing, wire transfers, managing working capital, and currency conversions
• Equipment lending and leasing services, which allows companies access to equipment for industries such as manufacturing, transportation, and information technology
• Commercial real estate services such as real asset analysis, portfolio evaluation, and debt and equity structuring
• 澳洲幸运5官方开奖结果体彩网:Trade finance, including 澳洲幸运5官方开奖结果体彩网:letters of credit, bill collection, and 澳洲幸运5官方开奖结果体彩网:factoring
• Employer services such as payroll and group 澳洲幸运5官方开奖结果体彩网:retirement plans

Many commercial banks also have affiliate 澳洲幸运5官方开奖结果体彩网:investment banking arms, which can offer commercial accounts related services, such as asset management and sꦬecurities underwriters.

Still, commercial banking is distinct from investment banking in that investment banking entails the creation of capital for other companies, governments, and other entities via 澳洲幸运5官方开奖结果体彩网:underwriting new debt and equity securities, aiding in their sales, and helping to facilitate mergers, 澳洲幸运5官方开奖结果体彩网:acquisitions, and reorganizations.

Commercial Accoun🐎ts and ♐the Earnings Credit Rate (ECR)

As noted above, most commercial accounts pay earnings credits instead of interest. However, in 2010, the 澳洲幸运5官方开奖结果体彩网:Dodd-Frank Act rolled back Regulation Q and allowed for some banks to offer interest on checking accounts for its corporate customers. The goal of this change was to increase banking reserves, ideally militating against credit 澳洲幸运5官方开奖结果体彩网:illiquidity,✨ which is a lack of funds to ✅cover losses and make loans.

The 澳洲幸运5官方开奖结果体彩网:earnings credit rate (or ECR) is a daily calculation of interest, often correlated with the U.S. 澳洲幸运5官方开奖结果体彩网:Treasury bill (T-bill) rate. Banks will pay ECRs on 澳洲幸运5官方开奖结果体彩网:idle funds, which reduce bank service charges overall. Essentially, customers with larger deposits and balances tend to pay lower baꩲnk fees. An ECR can be viewed on the analysis and billing statement of the com🧸mercial account.