Commercial Account

DEFINITION of 'Commercial Account'

Any type of financial account that is owned and used by a business or corporation. Commerical account usually refers to a checking or other type of demand deposit account. Regulation Q of the Federal Reserve prohibits banks from paying interest on this type of account. They instead pay earnings credits that are based upon the average account balance.

BREAKING DOWN 'Commercial Account'

Commerical accounts usually have higher monthly service charges and other related fees than retail accounts. Many firms also hold regular interest-bearing savings accounts, which do pay regular interest. Most states also allow sole proprietors to open negotiable order of withdrawal (NOW) checking accounts that also pay regular interest.

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RELATED FAQS
  1. For what types of accounts are demand deposits available?

    Learn about the different types of accounts designated as demand deposit accounts, such as savings accounts and money market ... Read Answer >>
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    Understand the various fees that can be assessed on a personal or business checking account, and learn methods to avoid being ... Read Answer >>
  3. Why would you keep funds in a money market account and not a savings account?

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    Read about some of the Federal Reserve's requirements and guidelines regarding the treatment, safeguarding and processing ... Read Answer >>
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