Capital One offering interest-bearing business checking
This morning, Capital One rolled out a new high-interest bearing checking account product for small business owners.
The product, called Clear Interest Business Checking, will allow small business owners to earn a “market leading interest rate” on their business checking accounts.
Mark L. Koshnick , San Antonio market president for Capital One Bank, says the bank anticipates a high level of interest among local small business and commercial clients because it “provides small business owners a simple, easy way to earn high interest.”
“The rate in San Antonio will be 1.1 percent for the first 12 months and a competitive rate thereafter,” Koshnick says, adding that starting Thursday, July 21, the product will be available at all Texas retail locations.
The news comes on the day that the repeal of Reg Q goes into effect (July 21).
The repeal of Reg Q was one of many components of the Dodd-Frank Act which was passed last July in an effort to bring about significant finance reform.
Reg Q was initially implemented in 1933 when all banks were prohibited from paying interest on commercial demand deposits.
Now that this legislation was repealed, banks can now offer its business customers with the option of checking accounts paid.
Capital One new product, Koshnick said, reduces the time small business owners spend money transfers in and out of high interest bearing accounts.
Interest Bearing Checking Accounts - News
This morning, Capital One rolled out a new high-interest bearing checking account product for small business owners. The product, called Clear Interest Business Checking, will allow small business owners to earn a “market leading interest rate” on
Banks are free to offer interest-bearing checking accounts for the first time since 1933. Advocates and experts suggest parsing the fine print By Karen E. Klein A provision of 2010′s Dodd-Frank Act, which went into effect on July 21, makes it possible
I would much rather get $20 million in an interest-bearing checking account than $20 million in high-interest yielding CDs." Some industry observers expect banks would likely hike lending rates to help pay for the higher cost of deposits.
For the first time since the 1930s, businesses can open interest-bearing checking accounts. As of July 21, the one-year anniversary of the Dodd-Frank Wall Street Reform and Consumer Protection Act, at least eight banks in the Tampa Bay area said they
The $67.15 million decrease in interest-bearing checking deposits is mainly due to declines in state and municipal interest-bearing checking accounts of $35.87 million, personal interest-bearing checking accounts of $14.76 million, and commercial
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When the Federal Reserve announced the repeal of a law banning interest-bearing business checking accounts, Capital One responded near-instantaneously with a new deposit account, Clear Interest Business Checking. Small business owners were previously required to sacrifice interest yields in order to keep their cash easily accessible, and either performed accounting gymnastics or suffered the consequences of effectively stuffing their money under a mattress.
As of July 21 , however, that landscape is changing.The 1933 law prohibits interest on checking fell, and Capital One has become the first bank to offer returns on corporate control, finally giving small businesses a chance to do something with their money.
Regulation Q: the forgotten clause in Glass-SteagallThe repeal of Glass-Steagall won its fair share of attention in the wake of the financial crisis, excluding the Volcker rule was a major point of contention between Obama and the Republican Party when the Dodd-Frank reform financial bill was designed.But amid the noise and fury on the separation of investment banks and depository, the repeal of a provision slipped unnoticed small but significant.
Regulation Q prohibits banks from paying interest on business checking accounts to encourage investment. The year was 1933, remember, and the government have tried everything in his power to get credit flowing again. But when the Depression ended, the regulation has grown to be a burden for small business owners. Earning interest on the tens of thousands in a checking account required transferring money to and from money markets, so business owners either paid banks to automate the process or had their bookkeepers handle the financial acrobatics themselves.
With the repeal of the Depression-era policy, business owners can now earn interest without devoting much-needed (believe us, we know it’s needed) brain space to figuring out how.
Capital One’s Clear InterestThe first-to-market account is Clear Interest Business Checking from Capital One , which earns 1.1% interest (0.5% in Louisiana). The account gives 300 free transactions a month, waives monthly maintenance fees on balances of $10,000+, and pays interest as long as 25 transactions are made each month.
Small business expert and entrepreneur Gene Marks admitted to complicated transfers from checking to money market and back in order to earn interest. “If you’re a small business and you’ve got $25,000 just sitting in your checking account, you feel like strangling someone.
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