Congress authorized interest on personal checking accounts in the 1980s, but major banks have lobbied successfully to keep business checking accounts interest-free. Two years from now, however, you may not need a sweep account to earn interest on your business’ checking account. In April, the House approved H.R. 974 – or Regulation Q as bankers call it. The bill would allow banks to pay interest on business checking, beginning two years after the bill’s enactment.
H.R. 974 would give more small businesses the opportunity to earn a much-needed market rate of return on their deposits, says Robert Davis, managing director of government relations for America’s Community Bankers. The bill also would allow more flexibility for transfers among business accounts. Under current law, businesses can make up to six interaccount transfers per month among business accounts at depository institutions. The proposed law would allow businesses up to 24 interaccount transactions per month.
H.R. 974 has not passed the Senate, but Senate Banking Committee Chairman Phil Gramm, R-Texas, may try to include the legislation in a larger piece of legislation later this year.
