Small Business Accounts
Question: What should we tell a small business owner who insists on an interest-bearing checking account?
Answer: First, the business cannot have a NOW account, in spite of what they may have heard from other small business owners. The only small businesses that may have NOW accounts are sole proprietorships. If your customer is not a sole proprietor, the answer is "no." However, you can offer the customer other options. For example, the customer can have two accounts, checking and money market. As long as the customer understands and follows the transaction limitation rules when moving funds from the MMDA to the checking account, they may actually earn more interest by having two accounts.
Copyright © 2004 Compliance Action. Originally appeared in Compliance Action, Vol. 9, No. 14, 12/04
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