About Ken Tumin

Ken Tumin founded the Bank Deals Blog in 2005 and has been passionately covering the best deposit deals ever since. He is frequently referenced by The New York Times, The Wall Street Journal, and other publications as a top expert, but he is first and foremost a fellow deal seeker and member of the wonderful community of savers that frequents DepositAccounts.

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Business Checking Accounts Can Now Pay Interest


Companies can finally earn interest on business checking accounts. The repeal of Regulation Q takes effect today. Regulation Q had prohibited banks from offering interest business checking accounts. This repeal is the result of last year's financial reform regulation (Dodd–Frank Wall Street Reform and Consumer Protection Act) which included this little-known provision.

As I described in my February post on best rates for business accounts, banks and credit unions have only been allowed to offer interest checking to sole proprietorships or non-profits. For all others, Regulation Q has prohibited banks and credit unions from paying interest.

In February I was hoping we would see some internet banks changing their rules to allow all businesses to open their interest checking accounts.

When I checked EverBank's website this morning, it still listed the business limitation on its Business Interest Checking (Sole proprietorships and non-profit organizations). However, I called and spoke with a business specialist, and she informed me that LLCs, partnerships and other businesses are now eligible to open this account. It seems they are a little behind in updating the website, but they are up-to-date on the new regulation.

EverBank's Business Interest Checking offers competitive rates especially for large balances. There is no monthly fee. However, like the personal account, there's a $8.95 monthly fee when you use online bill pay and when your average daily balance is under $5,000. For the Business Interest Checking, I was told there is a per item charge so each check you write will incur a charge. I could not see this mentioned in the fee disclosure. The Business Checking Account which pays no interest has no charge for the first 200 items per month.

There are not many other internet banks that offer interest checking for businesses. One is Ascencia Bank, but based on the bank's website, it appears the account is still just for sole proprietors.

According to Birmingham Business Journal large banks like Wells Fargo, BB&T and Regions say they will offer business interest checking. However, we all know the interest rates offered by those big banks will be so low that it won't be worth it.

In addition to the low interest rates, businesses have another reason not to want interest checking. Currently, there's a special FDIC provision that extends unlimited deposit coverage for 2 years on bank accounts that do not pay interest. For businesses with large balances, this unlimited deposit coverage will likely be more important than the little interest that they could earn with a business checking account.

Even though it may take a while before we see business interest checking accounts become more available, I'm encouraged by this change. The repeal of any regulation that inhibits banks from paying interest on deposit accounts is good news.

  |     |   Comment #1
Oh!, great, now more competition, for us on fixed income and depending on CDs and reward checking accounts for few extra bucks.

Congress is anti consumer, period.

Most of the big businesses have huge amount of cash stashed and even at 1% interest they will rip big benefits. There is no incentives for the banks to solicit money from the consumers or give away bonuses for opening accounts.
  |     |   Comment #2
I am starting to see a move up inthe 10 year yield. It seems to be happening whether the market is up or down. This may be due to the looming default and possible downgrade.

What do you think this will do to deposit rates? Have those rates gone up in Greece, Ireland and the rest of the PIIGS?
  |     |   Comment #3
ING direct has been down since about 11 pm last night.  The rep said it was up some this AM but he may be blowing smoke.

Capital One ****ing things up already ?  LOL
  |     |   Comment #4
Anon #2 - 

Don't configure your long term plans on a default...yes, it looks scary now, but the elected dufuses will begin to    cut the grandstanding and cave in and increase the debt ceiling....not for your benefit and mine, but to cover their own a$$es....like a clock, all bluster and venom and then a 'cave in' for the sole benefit of us. lol
Anon #4
  |     |   Comment #5
And, BTW, anyone agree with term limits?
  |     |   Comment #6
All elected officials already have term limits.  The voters simply do not exercise that option.  Forcing the voters to choose someone else after a certain number of terms is ridiculous when they could vote out anyone they wish at any election seems to me to just reinforce the stupidity of the voters.  If the voters continually elect the same people, they deserve what they get IMO.
  |     |   Comment #7
Response to Anonymous - #6.

The people are gullable and uninformed about the political process and most of the democratic support are from people on all sorts of handouts and entitlements.
As long as they have free food and shelter, they will vote the same people in for as long they are promised the Shangri-La land.
  |     |   Comment #8
#7 - 

Right on the money....and an excellent senario as to why we need term limits.  #6 might be right in theory, but his 'vote the rascals' out solution obviously does not pass muster in the real world....Barney Frank, and his continual stream of pork for the folks back home, is a prime example. So much for theory!
  |     |   Comment #9
It is interesting how savers, the people who usually visit this site, tend to be conservative and definitely opposed to the policies of this Administration and the our Federal Reserve. We are not going to find many welfare and food stamp recepients looking for competitive deposit rates and politically opposed to deficit spending and QE 1&2.
  |     |   Comment #10
To lou - #9,
Your observation is correct, however you missed to observe that the savers are also the back bone of this country and without them we will have to borrow even more from China and increase the deficit and the downfall of the economy will be sooner rather then later.

If we did’t elected conservatives in Congress, Obama would have destroyed America from within, remember the movie “The Machurian candidate”, that is what will happen if Obama is re-elected and the Congress falls in the hands of the liberals.
  |     |   Comment #11
To Anonymous #10

I agree with your comment. One reason the economy is doing so poorly is because savers are not being rewarded for their good behavior; instead, if you can believe it, they are being penalized
  |     |   Comment #12
lou -

Not only are savers being penalized, they(we) are being punished. And, to this day, I have not seen, or heard, of any politician or AARP, recognize the plight of the seniors attempt to live off of our diminishind income and principal. We are the forgotten bunch, until tax time comes around. In the meantime, the wall street crowd, and excess living mortgage payers, seem to be getting all the love.
  |     |   Comment #13
WAS SOPHIA LOREN IN THAT ? who is derek jeter
  |     |   Comment #14
But what is the alternative? No financial institutions - no possibility of earning interest at all?

As much as it is hard to admit, FI's are businesses and must have staff to accept and process deposits and loans. Staff require compensation. No compensation = no staff. No staff = no FI's. No FI's means no chance of earning interest. Or loan opportunities.

If you want big interest, you must take big risks, either through the stock market or some other avenue. If you want steady, guaranteed interest, banks are the way to go.

You can't get something for nothing.
  |     |   Comment #15
This is not entirely true. If you live in Minnesota there is still a Minnesota statute 48.50 the prohibits paying interest on a for profit business demand deposit account.

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