How banks can turn rising rates into a corporate deposit advantage

Rates are rising again, and corporate treasurers finally have somewhere else to put idle cash. On September 16, 2026, the Federal Reserve raised its benchmark rate a quarter point to a target range of 3.75%-4%, its first increase since 2023, with SOFR (the Secured Overnight Financing Rate) following to roughly 3.6%. For commercial banks, that shift turns deposit retention from a background metric into a front-line priority: the bank that compensates corporate balances well keeps them; the bank that doesn't watch them move to a money market fund or short-term Treasury bill instead.

A rising-rate market changes the deposit conversation

For much of the last few years, near-zero rates meant corporates had little incentive to actively manage where they parked short-term cash. That's no longer true. With the federal funds rate back above 3.75% and short-term Treasury and money market yields rising alongside it, corporate cash managers have real, competitive alternatives to leaving balances in a demand deposit account (DDA).

That makes this a pivotal moment for banks to revisit how they compensate corporate depositors. The traditional U.S. tool for that job, Earnings Credit, still works, but only if the underlying program is built to capture its full value.

Earnings credit: A proven model worth a second look

Earnings Credit Rate (ECR) programs calculate credit based on the balances a corporate customer maintains, then use that credit to offset eligible service charges. It's a disciplined, tax-efficient way to reward deposits, and it has stood the test of time for good reason.

The issue isn't the concept. It's that many banks' compensation structures leave earned value on the table, and in a rising-rate world, corporates now have more reasons to notice that value and more places to move it. Based on Infor's experience working with commercial banks on pricing and billing, four structural gaps show up most often.

Four places banks leave corporate deposit value on the table

1. Credit that's trapped in one relationship

Large corporates rarely have a single, simple relationship with their bank. A diversified customer may run several billing relationships with the same institution: one deposit-heavy, another built around transaction volume. A corporate in that position can be paying service charges on one relationship while sitting on unused Earnings Credit in another, with no way to apply it across the two.

When a cash manager spots that mismatch, the natural response is to move the excess cash somewhere it can actually be put to use. Some systems let a bank restructure the relationship to fix this, but that requires the customer to agree to change its billing setup, friction most treasurers would rather avoid. Infor™ Complete Billing System (CBS), a commercial banking pricing software built to handle exactly this kind of complexity, skips that step. Corporates can share excess Earnings Credit across billing relationships without renegotiating pricing structures, a practice that's quickly becoming standard among banks with multi-relationship commercial customers.

2. Credit that expires before it can be used

Multi-month settlement periods are common because they smooth out seasonal swings in cash flow, giving corporates an incentive to hold larger balances to offset fees incurred earlier in the cycle. The problem shows up at quarter-end: in many systems, any Earnings Credit left over when a period settles simply disappears rather than rolling forward. That design pushes corporates toward matching their balances precisely to what's needed for one settlement period, then moving anything extra into an alternate investment. That's exactly the outcome banks want to avoid in a market where alternatives now pay a real return. Infor CBS addresses it directly: it lets corporate clients carry excess Earnings Credit forward between settlement periods. That way, they earn and keep more of the credit they've already built up, instead of losing it at the cutoff.

3. Flat rates that don't reward bigger balances

More corporates want to earn interest on excess deposits, and the number of banks offering Net Interest Deposit (hybrid) products has grown accordingly. In the typical structure, a Balance Required amount is deducted to cover eligible service charges and interest is paid on whatever balance remains. When maintained balances fall short, the account simply runs as analysed.

That's a solid model, but it's rarely optimised. Tiering changes the incentive: as a corporate's balance increases, so does its Earnings Credit rate, which both lowers the Balance Required and increases the excess balance eligible for interest. Layering a tiered structure onto the Interest Rate itself, a form of tiered interest rate banking, compounds that reward further.

Not every corporate fits the standard hybrid model, and not every account is legally eligible for it. For those customers, Infor recommends a variant that pays interest on all checkable deposits using balance-based tiers, with eligible banking services deducted directly from gross interest. Non-compensable charges, and any excess interest-compensable charges, can be waived or settled against a nominated account.

• Tiered Earnings Credit and tiered Interest Rate structures are both standard Infor CBS features.
• So is the all-deposits hybrid variant, built for corporates who want to maximise interest beyond what a standard analysed hybrid offers.

4. Rate tables that can't keep pace with the market

Rate management is its own optimisation opportunity. The most reliable way to set Earnings Credit, interest and overdraft rates is to tie them to market benchmarks (SOFR, the 90-day T-bill, and similar indices) that can be updated quickly, with rate tables applying pre-determined spreads on top.

Fixed-rate tables are harder to keep current. In a market where the Fed has just moved rates for the first time in three years, banks running on static tables tend to respond by narrowing the options they offer, right when customers most want flexibility. A well-designed, benchmark-driven rate management system lets a bank offer a broader range of options across market segments instead of pulling back.

Two more balance-based levers worth adding

Beyond Earnings Credit and interest structures, a few additional mechanics give corporates more reasons to keep balances in place:

• Tie maintenance fees directly to balances, so corporates that hit predefined balance levels see specific monthly fees reduced or waived.
• Offer a minimum balance threshold above which eligible fees (common depository services, maintenance fees, or fees tied to a customer's specific line of business) are waived.
• Allow corporates to settle bank fees against a nominated external account. The bank still gets paid for net services, and the payment itself draws down balances the corporate holds at a competing institution.

Retention is the new revenue metric

Rising rates are as much a retention test as they are a revenue opportunity. Corporates now have real alternatives to idle DDA balances, and the banks that keep those deposits will be the ones whose compensation programs let customers use every dollar of credit they earn, carry it forward when they don't need it immediately, get rewarded for larger balances through tiered structures and see rates that move with the market rather than against it.

Earnings Credit still works. The fix is building the program flexible enough to capture its full value, which is exactly what Infor CBS's pricing, billing and rate management tools are built to do, even across the most complex corporate relationships.

To see how Infor CBS supports a rising interest rate strategy for corporate deposit compensation, connect with the Infor team.

Frequently Asked Questions

What is an Earnings Credit Rate (ECR)?
An Earnings Credit Rate is a credit a bank calculates on a corporate customer's average balances, then applies against that customer's eligible service charges. It's a long-standing alternative to paying interest directly on business checking balances, and it remains one of the most common ways US banks compensate corporate depositors.

What are the warning signs that a bank's Earnings Credit program is leaving money on the table?
A few signs are worth checking: corporates asking to consolidate or restructure relationships specifically to use unused credit, credit balances that reliably run to zero right before quarter-end and then rebuild, corporate clients moving idle balances to money market funds despite carrying unused Earnings Credit, and a rate table that hasn't been updated since before the Fed's most recent moves. Any one of these points to value that isn't reaching the customer.

What's involved in modernising an Earnings Credit program?
Usually less than a full system replacement. Most fixes are configuration and rate-table changes, such as letting credit carry forward between settlement periods, sharing it across billing relationships or adding tiered rate structures, since the underlying Earnings Credit concept doesn't change, only how it's calculated, carried forward and tiered. The heavier lift is typically deciding the business rules, such as how much credit to let carry forward or where tiering breakpoints sit, rather than the technical build itself.

How does a tiered Earnings Credit structure work?
A tiered structure increases the Earnings Credit rate as a corporate's balance grows, which lowers the amount of balance required to cover fees and increases the balance eligible for interest. It rewards larger relationships instead of applying the same flat rate regardless of balance size.