Charles Dolab is the kind of customer every banker likes.

Upon moving to Asheville,, N.C. in July 1989, the registered representative and certified public accountant found First Union Corp.'s Commercial CAP Account so much to his liking that he ended his search for a bank and started referring his new business clients.

"I didn't spend much time comparing and shopping once I found this (account)," said Mr. Dolab.

Patterned after Merrill Lynch & Co.'s successful Cash Management Account, First Union's CAP account was first introduced as a consumer product in the early 1980s, said Chris Wooten, a vice president and corporate products manager at the Charlotte-based superregional. Soon after, business customers were wanting one of their own.

"We started hearing a need for the product way back in 1983," said Mr. Wooten.

Today, the bank has just under 10,000 Commercial CAP Accounts open with a large reserve of cash to invest. Mr. Wooten said the accounts have an average cash balance of around $100,000.

The reason for the popularity is what the account offers companies with less than $20 million in annual sales. Account holders get a combination of check writing and investments, including an automatic daily sweep mechanism into one of two possible overnight investments, all for an $80 annual maintenance fee.

As a bonus, the bank automatically opens a brokerage account for its Commercial CAP customers to allow them to trade securities through the bank's securities arm.

The account offers convenience as well. Because First Union's franchises throughout its eight-state reach use the same system for deposits, interest and dividends received from securities purchased through the account are immediately credited to the customer, eliminating a trip to the bank to make a deposit.

It was this last feature that caught Mr. Dolab's eye.

"I could pay for securities and have them redeemed directly into the account," he said. "This is very unique."

Mr. Dolab said the account offers his corporate customers a way around a North Carolina law preventing banks from offering them interest-bearing checking accounts. Because the account is an asset management account, it does not carry deposit insurance and therefore is not subject to the state restriction.

Another useful feature is that First Union will automatically categorize each check for ease of accounting, he added. The bank does this by allowing customers to assign codes to the checks written on the account and recording the checks in that way on each month's statement.

For example, a customer wishing to keep track of how much is spent on office supplies can designate a code to the bank. The bank will record that code and indicate how many checks were written each month for office supplies.

That is not to say all businesses could use the account as their sole bank account. First Union limits customers to 100 free withdrawals per month, including checks. Beyond that, the bank imposes a $1 per check fee above the annual maintenance fee.

Likewise, if the account balance falls below the $20,000 minimum, the bank charges an extra $15 a month.

"If you meet the minimum balance, you basically get a free checking account, aside from the maintenance fee," said Mr. Dolab.

The account is particularly popular with professional associations like medical offices, law firms and CPA practices, said First Union's Mr. Wooten. It is also popular in Florida, where the bank's Personal Cap account was well received.

"We've been pretty successful in selling this product to business owners and entrepreneurs that already use a brokerage firm but would love to have everything in one spot," said Mr. Wooten. "We really view our only competition (as) coming from the brokerage houses."

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