Successful business owners understand the importance of uncovering all possible revenue streams. Most of their profits come from products or services, but business owners can also grow wealth with a business checking account in Maryland.
Interest-bearing checking accounts accrue interest while authorized users conduct normal business, such as paying vendors and employees.
Learn more about this product to see how it can diversify your income streams.
Maryland Interest-Bearing Business Checking Account Features
An interest-bearing business checking account in Maryland is similar to a traditional checking account. As with a standard account, account holders receive business checks and debit cards and access online banking.
Along with the standard features, these checking accounts pay interest based on the account’s principal and the annual percentage yield (API). Interest is deposited automatically, and can spend it as they wish.
Increase Earning Potential With Treasury Management and Merchant Services
Account holders can increase the interest paid by adding treasury management and merchant services to their business checking accounts in Maryland.
Treasury management services include ACH/direct deposit for payroll and bill pay, remote deposit, and other financial management features. These services increase checking account balances, thereby raising the amount of interest earned.
Companies also increase their monthly balances through merchant services, such as credit card processing. Merchant services are available for online and in-person use to help businesses boost revenue.
Business owners also earn more interest when maintaining higher balances due to credit card payments and other merchant services.
Calculating Interest for Business Checking Accounts
The average national deposit rate for interest checking was 0.07 in December 2023. High-yield checking accounts offer more impressive interest rates, sometimes 6% or more. Banks provide specific API information when business owners sign up for accounts.
Account holders should also review additional information regarding interest payments, such as possible interest caps. When an interest cap is in place, the institution pays the advertised API up to a predetermined amount.
After reaching that amount, the bank reduces the interest rate. The reduced rate is typically higher than the average national deposit rate when using a high-yield checking account.
Maintenance Fees for Interest-Bearing Checking Accounts
Banks charge account holders maintenance fees for their interest-bearing checking accounts. The average maintenance fee is $15.33, automatically withdrawn monthly from the account.
Some banks allow account holders to avoid the fee by meeting the minimum balance requirements. Depending on the financial institution, account holders may need to maintain a minimum daily balance, average minimum balance, or minimum combined balance.
If the account requires a minimum daily balance, the account holder must keep the minimum amount in the account each day of the month to avoid the fee.
An average minimum balance allows the account holder to go below the threshold throughout the month as long as the average balance meets the minimum requirement.
For a minimum combined balance, the financial institution adds the balance of all financial products and calculates the average balance. Since the minimum balance is calculated month by month, account holders only have to pay the maintenance fee for months they fail to maintain the minimum balance.
Interest Checking vs. Variable Earning Credits
Banks that provide interest-bearing checking accounts may also offer accounts that accumulate variable earning credits. Many business owners believe that the two are the same, but they are different financial products.
Both calculate interest or credits based on the monthly balance, but account holders use the money differently. Those with interest-bearing checking accounts receive deposits based on the interest earned and can spend the money freely.
Variable earning credits are not meant to be spent, though. Credits earned reduce or eliminate fees, but account holders do not receive interest payments.
The bank stops assessing credits once the amount earned meets the amount owed in service charges. The credits reset the following month, and the account holder starts earning again.
Additional Interest-Bearing Account Options
Business checking accounts provide one way for Maryland business owners to earn interest. Financial institutions also offer money market accounts, certificates of deposit, and savings accounts.
These products typically provide higher interest rates but have different flexibility than checking accounts. Many business owners choose a combination of products to ensure they can manage their finances while earning as much interest as possible.
How to Open an Interest-Bearing Business Checking Account
Avoid high fees while earning interest with a business interest checking account at Woodsboro Bank. This account features a competitive interest rate, and account holders do not pay a maintenance fee when maintaining a $1,000 daily minimum balance.
Contact Woodsboro Bank today to speak with a commercial banking expert. We can set up your account and discuss additional financial products, such as interest-bearing savings and money market accounts.