interest bearing business checking accounts.
Small business owners may find a new way of banking, thanks to a little-known amendment to the Dodd-Frank Wall Street Reform and Consumer Protection Act . Rather, they may find an old way coming back: interest bearing business checking accounts.
The amendment repeals a law that prohibited financial institutions from paying interest on business checking accounts. The prohibition, originally part of the Glass-Steagall Act of 1933, has been in force for nearly 70 years.
The New York Times’ Small Business section recently speculated on the potential impact. It’s questionable whether banks will offer interest on business checking accounts, the law does not require them to do, but merely permits them should they choose. Also, with interest rates currently at historic lows, the “benefit” certainly is not huge.
However, in today’s competitive economic landscape, small business owners would be wise to ask their bankers about interest-bearing checking accounts. Interest rates are not likely to remain this low forever, and the answer you get from your banker may indicate how anxious your financial institution really is to serve the small business owner in general.Tags: business accounts, checking account, Small business