nBank – High Interest Business Checking?

I have been searching high and wide for a business checking account that offered both a physical presence nearby and decent interest rates. That is looking increasingly unlikely, but I did find nBank, a bank online which offers a Business Money Market account that allows limited check-writing and currently pays a healthy 4.52% APY with a $3,500 minimum. The rates also look to remain high as it is based on the 3-month T-Bill rate.

Of course, it may be too good to be true. Although nBank is FDIC insured, Bankrate.com gives it a ‘weak’ Safe & Sound rating of only 1 star (the lowest possible), and this memorandum details how it is both losing money and has “questionable asset quality”. Yeesh.

Comments

  1. Anonymous says:

    The reason it might be difficult to find a bank that offers business interest checking accounts is because they do not exist. This stems from a depression era regulation that does not allow banks to offer business interest checking. Check out this site.

    http://www.nfib.com/page/businessCheckingInterest.html

  2. Very interesting! That is weird. No wonder they are always Money Market or Savings accounts.

  3. Anonymous says:

    Yes. The Fed has said it would like the rule changed but the Senate fails to take up the bill. The House overwhelmingly supported the bill with a 420 to 1 vote. I can only guess that large banks lobby very hard to keep the reg in place, they don’t want to pay out more in interest.

  4. Anonymous says:

    There is an exception in the law for sole proprietorships (and non-profits).

    Heritage Direct (Bankrate.com 4 stars) has a Savings/Money Market account available to both individuals and businesses that is currently at 4.49% ($1000 minimum/opening). It links to an existing checking account by way of ACH transfers like other popular “personal” accounts. You could call every bank in town, find the “best” rate for a business interest checking account, then link it to the Heritage Direct account. That would be a pretty good/convenient setup.

    http://www.heritagebankna.com/hdsavings.cfm

    (The page is under the “personal” banking section, but if you click the apply button, it allows you to chose from a number of different applications. i.e. personal, business, trust, estate, government).

  5. nbank, NA in Commerce, Georgia is probably going to fail- it would be the first bank failure in the USA since 2004

  6. nBank is now First Covenant Bank AKA First Commerce Bank. They are unrated. Heritage Bank doesn’t seem like a bad option. They have 3 Stars (Not 4).

  7. Heritage Bank is NOT a good idea for business checking. They charge $7-$10 a month, $0.50 per electronic bill pay, and up to $.017 per deposit item. They say they waive the fees at certain balance levels, but I just talked to them, and they don’t actaully waive them. They just deduct them from your interest.

    Guess I will give up on finding a business interest checking account.

    -Jared

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