Banks

I had the good fortune of having a largish check (for a long term consulting project) to deposit in my new business account. In January, I opened a combination checking and savings business account for my company with Union Bank of California. I have my personal account with them and although I haven't been overly impressed with the service at my local branch, I decided to ask about small business accounts when I was looking to open one late last year.

It turns out they waive fees for new accounts for the first two years, if you open a checking and savings account for your business. Since they waive the fees, there is no minimum monthly balance requirement, and my first set of checks, plus deposit stamp, were free, too. Seemed like a good deal to me, so I signed up. And the monthly fees are waived after two years as long as you keep a minimum balance that seemed low enough to me, that I figured if I couldn't keep that amount in 2 years, I shouldn't still be in business (something like $3000 combined).

I've deposited a few smaller checks in the account but have reimbursed myself for some expenses, leaving a small amount in my checking account, so I was excited to deposit my new check. It turned out to be a bigger hassle than I expected. I had 3 counts against me, apparently - the check was a large amount (compared to my average daily balance), my account is relatively new, and the check was drawn on an out-of-state branch of Citibank. So they are holding $5000 (their threshold apparently) for a week and the balance for 2 weeks!

I understand that they don't want me to withdraw the money before the check clears, but does it really take 2 weeks to clear a check from a major national bank like Citibank?

I'm not impatient to spend the money, but I am eager to move it over to an ING Business Savings Account where I can earn a respectable interest rate on the money. I don't know what the current business savings rate is, but it has been higher than the personal savings rate they offer which is currently 3.4% (it was over 4% before the Fed kept lowering the rates). Either way, it is better than the paltry 0.25% I could earn in my UBOC business savings account.