Transactional Accounts

• Commercial banks enable businesses and consumers to set up checking accounts, most of which are noninterest-bearing accounts. No deposit restrictions apply to checking accounts, and many large businesses pass large sums of money through these accounts on a daily basis. Some banks enable you to set up a sweep account if you typically keep high balances. If your bank account exceeds a certain amount on any given day, then your bank sweeps the excess funds into a linked interest-bearing account. This facility means that you can earn interest without having to conduct account transfers yourself. However, you do not have to take advantage of this service, and some account holders opt to leave large sums of money in checking accounts for lengthy periods of time.
  
  

Interest

• Commercial banks offer a wide variety of liquid savings accounts and certificates of deposit to business and consumer customers. Banks use tiered interest rates, which means that you earn a higher rate of interest if you deposit larger balances. However, most banks have interest rate caps, which means that the interest rates paid on balances begin to decrease if your balances exceed certain limits. Interest-bearing accounts are liabilities of the bank, so banks try to keep interest expenses to a minimum by imposing deposit caps.
  
  

Insurance

• Under federal banking regulations, you can deposit as much money as you like into a bank account, but the Federal Deposit Insurance Corporation only provides you with $250,000 of coverage in the event that the bank fails. For personal accounts, the deposit insurance applies on a per account signer, per bank basis. Therefore, you have $500,000 of coverage on a joint bank account. On a business account, the insurance coverage only protects the actual business entity and does not cover signers. Consequently, business accounts are only insured up to $250,000 per business entity, per bank.
  
  

Holds

• Under the federal banking regulation CC, commercial banks can place deposit holds on both consumer and business account deposits. The holds can extend to nine business days if you deposit a check for more than $5,000 into an account that has been open for less than 30 days. Holds on seasoned accounts normally amount to two business days for amounts below $5,000, or seven days for amounts in excess of $5,000. Therefore, while nothing prevents you from depositing large checks into a commercial banks, you may face a lengthy wait before you can withdraw the money.