Interest on Business Checking Act of 2005

Interest on Business Checking Act of 2005 - Amends Federal law to authorize interest-bearing transaction accounts for all businesses, permitting up to 24 transfers per month to another account of the owner in the same institution (or any greater number the Federal Reserve Board may determine).

Amends the Federal Reserve Act, the Home Owners' Loan Act, and the Federal Deposit Insurance Act to repeal the prohibition against the payment of interest on demand deposits.

Requires a joint rulemaking by the federal banking agencies authorizing the payment of interest and dividends on transaction accounts at depository institutions under their respective jurisdictions.

Amends the Federal Reserve Act to authorize the payment of interest at least quarterly by a federal reserve bank on reserves maintained there on behalf of a depository institution.

Revises the ratio of reserves a depository institution must maintain against its transaction accounts, permitting a ratio of zero.

States that, where escrow accounts are maintained at a depository institution for completion of a real estate settlement transaction, specified expense-taking or fee-waiving activities shall not be treated as the payment or receipt of interest for purposes relating to the payment of interest on accounts or deposits maintained at depository institutions.