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managed rate helps to maintain pricing flexibility while helping to protect clients <br />from the short -term rate volatility that could result from using an indexed rate. <br />In calculating the earnings credit rate (ECR), J.P. Morgan currently does not <br />deduct the reserve requirement from the available balance. Since October 1, <br />2008, the Federal Reserve has paid interest on reserves held at the Federal <br />Reserve by member banks. J.P. Morgan passes this benefit to clients by basing the <br />earnings credit on 100% of the eligible balance of non - interest bearing demand <br />deposit accounts. <br />Any cash remaining uninvested in a non - interest bearing demand deposit <br />account at the end of the day (as well as cash held in a Hybrid demand deposit <br />account that is at or below the designated peg balance) is used to determine an <br />earnings credit value on account balances. This credit is calculated by <br />J.P. Morgan, and the total credit accrued for the month is reflected on the <br />monthly account analysis statement and is applied to reduce the invoiced amount <br />due for banking service fees. <br />J.P. Morgan uses the following formula to calculate the monthly earnings credit <br />allowance: <br />(Avera¢e Positive Collected Balance x ECR x Actual Number Of Days in Month) <br />Actual Number of Days in Year <br />3. List the Bank's actual ECR for the past twelve months. <br />The bank's ECR for the past twelve months is shown in the chart below. <br />Standard/Premium ECR for <br />October, 2015 <br />the most recent twelve <br />0.20 %/0.30% <br />months <br />April, 2o16 <br />0.25 %/0.35% <br />November, 2015 <br />0.20 %/0.30% <br />May, 2016 <br />0.25 %/0.35% <br />December, 2015 <br />0.20% /0.30% <br />June, 2016 <br />0.25 %/0.35% <br />January, 2016 <br />0.25 %/0.35% <br />July, 2o16 <br />0.25 %/0.35% <br />February, 2o16 <br />0.25 %/0.35% <br />August, 2016 <br />0.25 %/0.35% <br />March, 2o16 <br />0.25 %/0.35% <br />September, 2m6 <br />0.25 %/0.35% <br />4. Explain In detail how and when you charge the FDSC assessment. <br />J.P. Morgan charges a Premium Assessment Fee (PAF) on all Demand Deposit <br />Accounts (DDAs) including Hybrid DDA's that exclusively receive ECR. The PAF <br />is a monthly administrative fee assessed to address various regulatory and other <br />charges affecting J.P. Morgan. The current Premium Assessment Fee is 0.13 %. <br />Page 110 J r Morgan <br />55E -205 <br />