Basic Uniform Commercial Code
Lowest Intermediate Balance Test
The lowest intermediate balance test identifies proceeds out of commingled funds. It comprises three assumptions:
- Funds withdrawn from a commingled account will first deplete nonproceeds.
- Proceeds are deemed to be withdrawn only if no nonproceeds remain in the account.
- Subsequent deposits of nonproceeds do not replenish proceeds.
I.e., the proceeds remaining in a commingled account are the lowest the account got after getting those proceeds.