What you need before you open a business account
A business bank account is a separate account in your business's name, not your personal name. Banks require proof that your business exists and proof of your identity before they will open one. The documents you bring depend on what type of business you have.
If you are a sole proprietor (you own the business by yourself with no partners), you will need a government-issued ID and proof that you registered your business name. This might be a DBA certificate (Doing Business As), a business license, or articles of incorporation if you formed an LLC or corporation. If you have not registered your business name yet, some banks will let you open an account under your personal name first, then transfer it once you have the registration paperwork.
If you have partners or employees, the bank will ask for more: articles of incorporation or formation, an Employer Identification Number (EIN) from the IRS, and identification for anyone who will sign checks or withdraw money. The bank may also ask for a resolution from your business partners authorizing the account.
Key Takeaways
- You will need a government-issued ID, proof your business exists (like a business license or DBA certificate), and an Employer Identification Number if you have employees or partners.
- Different account types charge different monthly fees and require different minimum balances, so compare what your bank offers before you choose.
- The bank will ask which owners or employees can sign checks and withdraw money, and you should decide this before you arrive.
- You will receive a routing number and account number once the account opens, which you will need to set up payroll, pay bills, and receive payments.
- Some banks offer a grace period before monthly fees start, so ask whether you have time to deposit money before charges begin.
Choosing between account types
Banks offer different business account types, and the one you choose affects what you pay each month and what features you get. A basic checking account is the most common choice for small businesses. It lets you write checks, use a debit card, and deposit money. A money market account pays interest on your balance but usually requires a higher minimum balance and limits how many withdrawals you can make each month. A savings account for business works like a personal savings account but is held in your business name.
Most small businesses start with a checking account because it is the simplest to use and the fees are straightforward. Before you open one, ask the bank what the monthly fee is, whether there is a minimum balance you must keep, how many checks you can write for free, and whether there are fees for transfers or wire transfers. Some banks waive the monthly fee if you keep a certain balance or set up direct deposit.
If you expect to have money sitting in the account that you are not using right away, a money market account might earn you interest. However, you will usually need to keep a larger balance (often $2,500 or more, though this varies by bank) and you may be limited to a certain number of withdrawals per month. For most new businesses, this is not worth the extra rules.
What to bring to the bank
Bring your government-issued ID and the business registration documents you have. If you have not received an Employer Identification Number yet, bring the application you submitted to the IRS (Form SS-4) or the confirmation email showing your EIN. If you do not have an EIN and do not need one yet (because you are a sole proprietor with no employees), the bank can open the account using your Social Security number instead.
Bring a list of anyone who will be authorized to sign checks, withdraw money, or make decisions about the account. The bank will ask for their names, titles, and identification. You do not need to bring them with you — you just need to tell the bank who they are. The bank will send them documents to sign later, or you can bring them to sign in person.
Bring a small deposit if you can. Most banks require an opening deposit to activate the account, though the amount varies. Some require as little as $25; others require $100 or more. Ask the bank what the minimum is before you go, so you know how much cash or a check to bring.
The steps to open the account
Call the bank or visit a branch and tell them you want to open a business checking account. They will give you an application form or walk you through an online application. The form will ask for your business name, the type of business you have, your address, your phone number, and information about the owners.
The bank will verify your identity using your government-issued ID. They will also check your business registration documents to confirm that your business exists. If you are opening the account in person, this usually takes 15 to 30 minutes. If you are opening it online, the bank may ask you to upload photos of your documents, and approval can take one to three business days.
Once the bank approves your application, they will give you your account number and routing number. Write these down or take a photo — you will need them to set up payroll, pay bills online, and receive payments from customers. The bank will also order checks and a debit card, which arrive by mail in one to two weeks.
Setting up online banking and bill pay
Ask the bank to set up online banking access when you open the account. This lets you check your balance, transfer money, and pay bills from your computer or phone without going to the bank. The bank will give you a username and temporary password. Change the password to something only you know the first time you log in.
Once you are logged in, set up bill pay if the bank offers it. Bill pay lets you schedule payments to vendors, contractors, and service providers directly from your account. You enter the payee's name and address, the amount, and the date you want the payment sent. The bank mails a check or transfers the money electronically. This usually takes three to five business days, so plan ahead if a bill is due soon.
If you have employees, ask the bank about payroll services. Some banks offer payroll processing where you tell them how much to pay each employee, and they handle the taxes and direct deposits. Other banks can connect you with a payroll company. You will need your account number and routing number to set this up.
Understanding business account fees
Most business checking accounts charge a monthly maintenance fee, though the amount varies widely. Some banks charge $10 to $15 per month; others charge $25 or more. Many banks waive the fee if you keep a minimum balance (often $1,000 to $5,000) or if you set up direct deposit.
Beyond the monthly fee, watch for other charges. Some banks charge per check if you write more than a certain number each month. Some charge for wire transfers, ACH transfers (electronic transfers between banks), or overdrafts. A few charge for deposits or for using an ATM outside their network. Ask the bank for a complete fee schedule before you open the account so you know what to expect.
Some banks offer a grace period — usually 30 to 90 days — before monthly fees start. This gives you time to deposit money and get the account running before you are charged. Ask whether your bank offers this, and if so, how long it lasts.
After the account opens
Once your account is open, set up a system to track what money comes in and what goes out. Many business owners use accounting software like QuickBooks or Wave (which is free) to record transactions. These programs connect to your bank account and automatically pull in deposits and withdrawals, which saves time and reduces mistakes.
Keep your business account separate from your personal account. This makes taxes easier at the end of the year and protects you legally if your business is an LLC or corporation. Do not use the business account for personal expenses, and do not use your personal account for business expenses.
Review your account statement every month to catch errors or unauthorized charges. If you see a transaction you did not make, contact the bank right away. Most banks have a window of 30 to 60 days to dispute a charge, so do not wait.
Frequently Asked Questions
Do I need an EIN to open a business bank account?
Not always. If you are a sole proprietor with no employees, you can use your Social Security number instead. However, if you have employees, partners, or you formed an LLC or corporation, you will need an EIN. You can get one free from the IRS at irs.gov by filling out Form SS-4 online, which takes about 15 minutes.
Can I open a business account online, or do I have to go to a branch?
Many banks let you open a business account online, though some still require you to visit a branch in person. Call your bank or check their website to see which option they offer. Online applications are usually faster, but the bank may ask you to upload photos of your ID and business documents.
What is the difference between a business account and a personal account?
A business account is held in your business's name and is designed for business transactions. A personal account is held in your individual name. Banks usually charge higher fees for business accounts because they expect more activity. More importantly, keeping them separate protects you legally and makes accounting simpler.
How long does it take to open a business account?
If you open the account in person at a branch, it usually takes 15 to 30 minutes. If you open it online, approval can take one to three business days. Once approved, checks and a debit card arrive by mail in one to two weeks. You can start using the account immediately online, even before the physical cards arrive.
What happens if I do not have all my documents ready?
Call the bank and ask what you can bring now and what you can send later. Many banks will open the account with your ID and a temporary authorization, then ask you to send business registration documents within a few days. Do not wait too long — the bank may freeze the account if you do not provide the documents within the timeframe they give you.