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How do I open a business bank account?

April 10, 2023 | 4 minute read

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If you’ve started a new business, one of the most important steps you can take to keep your personal and business finances separate is to open a business bank account.

As a new business owner, you may not know what to expect when you open a business bank account. You can usually apply for a business bank account fairly quickly by filling out the required forms and providing the documentation the bank requires. Knowing the information and documents required in advance can streamline the process of getting it set up.

To learn more about the steps to launch a new business, including how to form your business with an exclusive offer from Incfile, visit The Bank of America Start a Business Center .

What do I need to open a business bank account?

Business bank accounts can generally be opened fully digitally online or through a mobile device. Alternatively, business owners can visit a branch or call to start an account.

You may need some or all of the following, depending on how you have formed your business’s legal structure:

  • The address and phone number of your company
  • The name(s) of the people who will be listed as account owners
  • Personal identification such as your driver’s license
  • A federal tax ID number for the business, also known as an employer identification number
  • Your Social Security number if you are a sole proprietor
  • State or local authority documents that show you’ve formed a legal entity, such as a limited liability company (LLC)
  • The bank’s minimum deposit amount. Unfunded accounts may be forced to close or encounter overdraft fees.

To address other questions you may have about opening a business bank account, see our Frequently Asked Questions .

Why open a business bank account?

It makes it easier to track your business’s inflows and outflows so you have a bottom-line accounting of revenue and expenses. It can be very challenging to do your taxes accurately at year-end if you have commingled your personal or family finances with those of your business.

Business bank accounts make it easier for you to give another person — like a business partner or bookkeeper — access to your transactions. And business bank accounts come with many tools not available on consumer accounts that make it easier for you to run your business.

Establishing a business bank account can also help you build your business’s credit profile .

What types of business bank accounts are there?

Three types of business accounts will help you operate your business.

  • A business checking account allows you to accept deposits and make payments and serves as the core operating account for your business. A business checking account will also enable access to the many digital tools and capabilities your bank provides. Not all banks use the word “checking” to describe these business operating accounts.
  • A merchant services account enables you to accept credit and debit card payments from your customers. It’s connected to your checking account.
  • A business savings account allows you to put money aside for taxes or big purchases. These accounts pay interest on the balance.

What is there to consider when picking a type of business bank account?

Here are some things to look at:

  • Fees and minimum balances. Ask how much you will pay. Remember banks might waive fees if you keep a minimum balance or use your business debit card a certain amount.
  • Cost of merchant services. This is the cost of accepting credit or debit cards, so estimate your monthly costs based on the size and frequency of your credit and debit card transactions with customers.
  • Digital tools. Look for an account that provides access to business-specific digital capabilities such as cash flow tools, integration with accounting platforms, and payment and invoicing abilities.
  • Customer service. How easy is it to get help? Can you meet with someone in person if you need to?
  • Perks or rewards. Many accounts and affiliated credit cards have point programs or membership programs that will provide incremental benefits based on your relationship and account balances.
  • ATM access. Do you need to withdraw cash or to make deposits through an ATM?
  • Branch access. If you need to visit a branch and speak with a specialist, how easy and convenient will this be? Many owners find that it is worthwhile to stop in regularly and build a strong working relationship with their bankers , who can be a source of valuable insight as a business grows.

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How to Open a Business Bank Account in 5 Steps

Kelsey Sheehy

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Table of Contents

1. Choose a business checking account

2. gather the necessary documents and apply, 3. fund your newly opened business account, 4. set up your business checking account, 5. consider other types of business bank accounts.

Opening a business bank account is typically necessary for small businesses of all sizes to keep their personal and professional assets separate. Business checking accounts help all sorts of entrepreneurs manage company finances, streamline invoicing and simplify tax filing. And applying for one may only take a few minutes if you gather what you need to open a business account in advance.

Here's how to open a business bank account.

Bluevine Business Checking

Bluevine Business Checking

Most businesses should start banking with a business checking account. If your business is small, that may be all you need. As your business grows, however, your banking will likely get more complicated — you may need multiple types of accounts, potentially at multiple banks. (More on that below .)

There are lots of free business checking accounts , many with no minimum balance requirements. Consider which of the following factors are most important to your business to help determine where to open your business account:

Monthly fees.

Minimum balance requirements.

Included fee-free transactions.

ATM access (withdrawals and deposits).

Wiring, transfer and payment capabilities.

Incidental fees (stop payment, nonsufficient funds, overdrafts).

Additional features, including bill pay, invoicing, accounting software integration or other business tool integrations.

Ready to choose a business checking account?

See our overall favorites, or choose your business type to find the best options for you.

on Nerdwallet's secure site

In general, brick-and-mortar banks offer a personal touch and well-established ATM networks, along with other financial products like business credit cards and small-business loans . But they usually limit monthly transactions and charge more fees.

Online business bank accounts are more likely to offer unlimited transactions and fewer incidental fees, but you won’t be able to walk into a branch for help. Also, note that many of these are neobanks — not banks themselves, but financial technology companies that partner with banks to keep your funds in accounts protected by the Federal Deposit Insurance Corp. (FDIC).

No matter where you bank, make sure your funds are insured up to at least the FDIC limit of $250,000 per depositor, per institution.

» Not sure where to start? Check out our picks for best banks for business accounts .

Most banks, even brick-and-mortar ones, now let you fill out an account application online. A handful may require you to come into a branch to complete the process, though, and you can kick things off in person at such institutions as well.

Applying at a branch might take longer, but can make sense if you want to ask a business banker questions as you go. Online applications can typically be approved right away, though you may need to supply additional documentation in certain instances.

What you'll need to submit in your application can vary. But expect to provide at least the following:

Personal and business information, like your Social Security number and Employer Identification Number (EIN). 

Business formation documents.

Any organizing or partnership agreements.

Other items on this checklist .

» MORE: Can you open a business bank account without an EIN?

Most business bank accounts can be opened with $0, but some business checking accounts require an opening deposit, which typically ranges from $25 to $100. Business savings accounts can have higher deposit requirements — anywhere from $1,000 to $25,000, depending on the account — but you can still open many with $0 to start.

Business accounts that can be opened with no money still require you to fund the account within a specific timeframe or the financial institution will close the account for inactivity.

Did you choose a business bank account offering a promotion ? Now is a good time to review its terms. Many of these offers require you to deposit a certain amount of money right away and maintain an average balance for several months.

Avoid depositing all of your business’s assets at once. Most business accounts place a longer hold on deposits for new accounts, and you could lose access to those funds for 7 to 10 business days. Other accounts will flag large deposits, followed by large transactions, for fraud.

Once your account is open and funded, it’s time to set up your account. Start by downloading your bank’s mobile app and then sign up or log in to the online banking platform.

Then, connect your new bank account to your business accounting software and any other relevant business tools — many business bank accounts offer direct integration with popular software and apps like QuickBooks, Xero, FreshBooks, Shopify and Gusto.

You can also add authorized users and set appropriate permissions. This may be important based on your business setup. For instance, if you're opening a business bank account for an LLC , multiple members of your organization may need access. You can also set up recurring payments and account alerts.

Your main business debit card will ship automatically and typically arrive in seven to 10 business days. If your bank offers these options, you can order checks and request any additional employee debit cards.

Banks offer several other types of business accounts — including business savings accounts and merchant services accounts — each with its purpose and benefits.

Not every business needs these accounts right away. You may be able to use a payment processing company instead of opening your own merchant services account, for instance.

But as your business grows, you’ll likely need additional accounts. That could be for operational efficiencies — like keeping payroll in its own account. Or it might simply be to take advantage of higher interest rates: Leveraging a high-yield savings or business money market account for your cash reserves could make sense when you're saving for emergencies or longer-term goals, such as expansion.

Opening those accounts at multiple business banks can offer benefits as well. That way, in case of an unexpected account freeze or failure at one bank, you’ll still have access to your funds stored elsewhere. Also, once your balances exceed your institution’s FDIC coverage, opening an account at a different bank can extend that limit to further safeguard your money.

On a similar note...

How to Open a Business Bank Account

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Lisa Furgison

7 min. read

Updated October 25, 2023

One of the key items on your new business’s  startup checklist  is opening a business bank account. Wherever you decide to open an account, you’ll likely use that bank or credit union for years to come. It’s not just a place to hold your money; it’s a partner that you’ll want to develop a relationship with as your company grows, especially if you  seek a loan  or line of credit.

We’ve created this guide to help walk you through the process of setting up a business bank account. We’ll help you  find a bank that’s right for you , help you weigh banking features, and go over the setup process.

  • 3 reasons you need a business bank account

If you’re just starting out, you might wonder why you need a business bank account. Why not just use your personal accounts? Any serious entrepreneur will tell you that a business account is vital to your success.

Why? Here are a few reasons.

1. To track your expenses

If you keep your personal and business accounts together, you’ll have to sift through each transaction to see how much money came in and went out.

It’s a tedious task that eats away at time that’s better spent improving your business. It’s a smart idea to start a business credit card for the same reason. It’s really hard to  monitor your company’s cash flow  if it’s mixed together with your personal money.

2. To alleviate tax headaches

When  tax time rolls around , you want to have all of your numbers in one place. It’s infinitely easier to turn over bank statements to an accountant that are solely based on your business.

From those statements, a skilled accountant can look for tax deductions and incentives. Even if you decide to do your own taxes, an account dedicated to your business will be a lifesaver.

3. To start a relationship with a bank

At some point, you might  need a loan for your business . Hopefully, in a few years, you’ll look to expand.

If you already have a relationship with a bank, you’re one step closer to getting funding. This connection, combined with  a solid business plan , will help you secure the funds you need to grow.

  • Considerations to help you pick the right bank

You have a variety of options to choose from. Should you go with a big corporate bank, a regional bank, or a credit union? It’s a tough decision. It all depends on what you’re looking for.

Here are a few points to consider.

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Every bank has fees, some more than others. Be sure to ask about fees and their structure.

In some cases, you’re charged for not keeping a minimum balance in your account. ATM fees can add up. Some banks even charge a “maintenance fee” just to keep the account open.

Typically, big banks can offer lower fees because they have a higher volume of clients. Ask how common it is for fees to increase too, or if any of the rates are promotional and expire quickly.

Lending ability

Inquire about lending ability. Can the banker you work with authorize  a small business loan , or does it have to go through sixteen layers of corporate executives first? It’s something you’ll want to know upfront.

Typically, regional banks and credit unions have more flexibility here.

Online features

Most entrepreneurs want online features. Most banks offer them.

From online bill pay to the ability to transfer money from your business account to your personal account, ask about specific features that you need and compare prices with other banks.

Customer satisfaction

In some cases, working with your local branch provides personal satisfaction, but according to a J.D. Power customer satisfaction  survey , big banks outrank their smaller counterparts in this area. It’s something you’ll have to weigh for yourself.

Online banks

There are a growing number of online banks, and some entrepreneurs find their features appealing. Online banks tend to offer optimized digital features, like banking apps and user-friendly dashboards.

Of course, there’s no face-to-face connection, which depending on your business could be a pro or con. It can also  be challenging to deposit cash , if your business has a brick and mortar location.

Finding the right bank is probably the most time-consuming part of the process. It will take some time to investigate what each bank has to offer and how it works within your business.

  • What you should bring when opening an account

When you’re ready to open a business bank account, you’ll need to gather some paperwork to take with you. Here’s a quick list of what you should bring.

Employer identification number

Before setting up an account, you’ll need an  employer identification number, or EIN . The government uses this number to keep track of your business and its tax requirements.

You can apply online to get this number through the  IRS website . After filling out some forms online, you’ll get the number immediately.

Make sure you have your driver’s license with you. The bank will need a proper form of identification to prove you are who you say you are. If you have an official business partner, they will need to bring their ID also.

Certification of business identity

No matter what kind of business you establish, you’ll have to file paperwork with the state. The bank needs this information on  your business structure  too.

If you  set up an LLC , you’ll need articles of organization. If you set up a proprietorship, you’ll need your  DBA (doing business as ) papers. If you set up a corporation, you’ll need to bring your articles of incorporation. If you have a business partner, bring your  partnership agreement .

Business license (only required for certain businesses)

In some states, specific businesses need a  business license  to operate. When you establish your business with the state, you’ll be notified if you need a license. If it’s required by the state, the bank will need to see it to make sure your business is legitimate.

Bank application

Every bank is different, but there’s always an application to fill out. It’s a good idea to pick up the application and fill it out at home. That way, you’ll be ready to go as soon as you sit down with a banker.

  • What to expect when you open an account

You’ll sit down with a banker and talk about your business needs. The banker will go over different account options with you and review your paperwork. If you haven’t filled out an application ahead of time, you’ll do that too.

You’ll fill out a signature card so the bank can check your signature against various transactions. If you have a business partner, he or she will need to sign a card as well to have access to the account.

The bank will check your  personal credit score . The bank wants to know who they’re dealing with, so expect them to take a look at your financial history. If you plan to ask for a line of credit or a loan, some of that decision will be based on your credit score.

The whole process will likely take an hour or so, maybe longer if you plan to discuss additional products like savings accounts,  business credit cards , or lines of credit.

You’ll be issued a temporary checkbook, and most banks issue a temporary ATM or debit card. Your official checkbook and debit card are mailed to you several days later.

  • Maintaining your bank account

At least once a year, it’s a good idea to review your banking choice. Review the fees and make sure you’re not being charged for anything new. If you see anything out of the ordinary, call your bank to discuss the problem.

Clarify your ideas and understand how to start your business with LivePlan

Content Author: Lisa Furgison

Lisa Furgison is a multimedia journalist with a passion for writing. She holds a graduate degree in mass communications and spent eight years as a television reporter before moving into the freelance world, where she focuses mainly on content creation and social media strategies. Furgison has crisscrossed the U.S. as a reporter, but now calls Key West, Florida home. When she's not conducting interviews or typing away on her laptop, she loves to travel.

do you need a business plan to open a business bank account

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How to Open a Business Bank Account

What you need to open a business bank account, types of business bank accounts, best business bank accounts, factors to consider when opening a business bank account, frequently asked questions.

  • Small Business

Learn what it takes to open a business bank account

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If you’re starting a new business, opening a business bank account is a big step in making things official. Even if you’ve already been in business for a little while, you might have noticed that high fees and low interest rates are quite common, so you may be reconsidering your options.

The nuts and bolts of how to open a business bank account are a little more detailed than for your personal bank account, but it’s not overwhelming. We’ll walk you through what you need to know.

The right business bank account can help your business leap ahead. Here’s how to do it:

  • Gather your documents: Most banks require the same documents to apply, which we’ll discuss more in-depth below. If you gather and organize these ahead of time in a nice folder, it’ll really help speed up the process.
  • Consider your needs: Not everything needs all of the features that small business banks offer. If you don’t regularly accept credit card payments, for example, you won’t need to worry about opening a merchant services account.
  • Consider your wants: What’s most important to you? For example, are you more concerned about earning a good interest rate on your savings account, or not having to pay any fees? This will help guide your search.
  • Comparison shop for banks: Draw up a list of banks and record the details that are important to you, such as minimum balance requirements, integrations with accounting programs you use, potential business loans or business credit cards you might apply for later, and other factors.
  • Investigate your top choice in more detail: If you can, get a list of all fees and policies for the business account and read through them, taking notes as needed. That way, you have a clearer picture of any potential charges or problems you might run into later.
  • Apply for a business bank account: Depending on the bank, you might be able to apply online, in person, or over the phone. You’ll need to provide the documents you gathered earlier and may need to provide other details as well, depending on the bank.
  • Make an opening deposit and start using the account: If you’re approved for an account, go ahead and transfer your business funds to your new account.
  • Close your old business bank account: If you were using another business bank account previously, make sure you contact the bank to close the account. That way, you won’t inadvertently be charged any other fees or encounter potential fraud schemes.

A business bank account helps shield your personal funds from lawsuits, allows you to accept customer payments without giving out your personal bank account number, speeds up tax time, and more.

If you’ve opened a personal bank account, you know it’s not too complicated. Opening a business bank account requires a bit more information, but generally, it’s information you should have readily available anyway.

Personal Information

Banks need to make sure you’re a real person and one who is eligible to open an account. They’ll ask for your personal information as well as that of any other business owners. The information you’ll need to provide might include:

  • Date of birth
  • Citizenship status
  • Social Security Number
  • Address and phone number
  • Copy of your government-issued ID such as a driver’s license or passport

Business Information and Documents

In addition to verifying that you’re a real person, the bank will want to check that you’re running a legitimate business. Some of the documents it might require depend on what kind of business structure you’re using, such as an LLC or sole proprietorship. These requirements might include:

  • Business name and any other registered DBA ("doing business as") names
  • Business licenses
  • Business registration
  • Business formation documents such as articles of organization for LLCs
  • Business operating agreements
  • Business ownership agreements

Remember that not all businesses will have these documents—but if yours does, you’ll need them to open your business bank account. Sole proprietors, for example, won’t have business formation documents.

Employer Identification Number

An Employee Identification Number (EIN) is like a Social Security Number for your business. You use it when dealing with the IRS or in other business-finance-related matters, like opening a business bank account. The IRS allows you to easily apply for a free EIN online .

If you’re running your business as a sole proprietor, you generally don’t need an EIN. But it’s a good idea to have one so you’re not handing out your personal Social Security Number when dealing with business matters.

Bank Minimum Deposit

Some banks require a minimum deposit to open a new business bank account. Check if this is a requirement in advance and if so, make sure you have funds available to transfer and get things started. Keep in mind that the minimum opening deposit may or may not be the same thing as the minimum monthly balance to waive any maintenance fees. Depending on the bank and the type of business account, businesses might receive access to a warm card . This card allows employees to make deposits on behalf of the company.

Most businesses will need a few different types of business bank accounts .

Business Checking Account

Just like your personal checking account, your business checking account is the mover and shaker for your business. It’s what you’ll use to make most of your purchases, and it’s where you’ll generally receive your payments. If you have a business credit card, it’s also what you’ll use to pay off your charges.

Business Savings Account

While it’s not required, having a business savings account is a good idea. It gives you a place to park long-term funds that you’re not using, and even earn a little bit of interest. You can use it to save up for periodic tax payments, for example, or for new business investments. They operate similarly to business money market accounts , and it’s a good idea to investigate both to see which fits your needs better.

Merchant Account

A merchant account, or “merchant services account,” lets you accept credit card payments from customers and protects their data. If you’re running a retail business or otherwise accept credit card payments frequently, look for a merchant services account with low fees, because there can be several.

Alternatively, more business owners are turning to payment processing companies like PayPal or Square to do the same thing, although they’re not technically bank accounts. Check into both options to see which works better for your business needs. If your business doesn’t accept credit card payments, you may not need either.

Here are a few things to think about as you’re shopping around:

  • Branch access: If you’ll be handling cash frequently, having access to a local branch can be important. If you only accept digital payments or checks, this might not be as much of an issue.
  • Fees and minimum balances: Many business bank accounts charge higher fees—and more of them—than for personal accounts. Choosing a bank with lower fees helps you keep more of your money.
  • Customer service: Do you prefer a hands-off bank, or do you want to be able to call someone for help at any time? That can be important if your credit card machine breaks down in the middle of a busy sales period, for example.
  • Benefits and rewards: Some business banks offer extra perks and features. This may be more common for banks that offer business credit cards , which often offer cash back or travel rewards.
  • ATM access: If you’ll be traveling a lot and need cash, how many in-network ATMs does the bank have? If you need to use an out-of-network ATM, what fees does it charge?

If you’re serious about earning money outside of a normal job, whether as a large multi-employee business or even just a solo side hustle for extra cash, opening a business bank account is one of the smartest money moves you can make.

Are Business Bank Accounts FDIC Protected?

Yes, business bank accounts are insured by the FDIC up to a limit of $250,000 per bank. Keep in mind that if you’re operating as a sole proprietor, this $250,000 cap applies to your personal accounts at that same bank, too, even if you have separate personal and business accounts.

Do Business Accounts Have a Minimum Balance Requirement?

It depends on the bank. Many banks have a minimum balance requirement for business accounts, and you may have to pay a fee if you don’t maintain this amount. However, it’s also not hard to find business accounts without minimum balance requirements.

Does Opening a Business Bank Account Hurt Your Credit?

No. Banks don’t generally check your credit report when you open a business bank account since you’re not applying for credit, only a deposit account. However, if you apply for a business line of credit or a business credit card, then banks will do a hard credit check and this could temporarily lower your credit score .

Do You Need a Business License To Open a Business Bank Account?

Generally yes, you will need to show your business license to the bank to prove that you’re a real business before you can open a business account at most banks. Depending on the type of business you’re running, you may need different types of licenses from federal, state, or local agencies.

IRS. " Does a Small Company That Operates as a Sole Proprietorship Need an Employer Identification Number (EIN)? "

Federal Deposit Insurance Corporation. " Basics of Deposit Insurance for Businesses ." 

Experian. " Can I Open a Business Bank Account With Bad Credit? " 

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Home > Finance > Banking

How to Open a Business Bank Account

Chloe Goodshore

We are committed to sharing unbiased reviews. Some of the links on our site are from our partners who compensate us. Read our editorial guidelines and advertising disclosure .

Choosing to open a business bank account is kind of a big deal. It’s one of the best ways to legitimize your business, indicating that your business’s finances are separate from your personal finances because you’re a real small-business owner now.

But how do you go about opening that separate bank account?

In this guide, we’ll explain each step of getting banking services for your business. Whether you need a checking account or a savings account, the process ahead will help you get your money in the right place.

Let’s get banking!

  • Figure out what kind of account(s) you need.
  • Decide what features you want in your account.
  • Choose the right bank for you.
  • Gather your business documents.
  • Open your business bank account.
  • Use your new bank account!

do you need a business plan to open a business bank account

1. Figure out what kind of account(s) you need

Okay, let’s start off with an easy task: choosing what kind of bank account your business needs. First, you need to decide between a checking account and a savings account.

If you’re like most small businesses, you probably want a checking account . You likely already know the basics about checking from having a personal account: it’s an account that lets you easily access your money. You can deposit checks, get paid, or make payments with your business checking account.

Business checking account vs. business savings account

But if you find yourself with extra cash on hand (lucky you), then you might also want a small-business savings account . These accounts have higher interest rates than checking accounts do, which means your spare cash can earn you more money just by sitting there. The catch? Your access to your savings account is often limited.

How so? Well, the Federal Reserve has historically placed a six-transaction limit on savings accounts. This meant people could only withdraw money six times per month.

While this rule is still technically in place, the Federal Reserve no longer enforces it as of April 2020. 1 As a result, banks are now free to allow customers an unlimited amount of withdrawals, although they are not required to do so .

If you're able to avoid touching your money for a while and you want to maximize your savings, you might opt for a CD (certificate of deposit) instead. In that case, you can’t access your funds at all until the end of a specified term, unless you want to pay a potentially hefty early withdrawal penalty.

Once you know what kind of business bank account you need , you can start narrowing down the field.

do you need a business plan to open a business bank account

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2. Decide what features you want in your account

Look, there are a lot of banks out there that want your business’s banking business. The easiest ways to narrow them down is to figure out if there are any specific features you need from your business bank.

For example, if you don’t have a ton of cash on hand, you might want the checking account that has the smallest possible opening deposit. Or if you have highly variable cash flow, you might prefer an account that won’t charge you monthly fees for carrying a low balance

Or let’s say you depend on your accounting and payroll software to keep your money in order. You’ll probably want a bank account that’s compatible with that software. Otherwise, it’s back to manual money crunching for you.

Here are some other features you might consider:

Number of branch and ATM locations

  • Mobile and online banking options
  • Bill pay capabilities
  • High interest rates (for savings accounts)
  • Discounted ATM fees
  • No minimum balance
  • No transaction fees

You might also want to look for a bank that offers complementary services like these:

  • Merchant account services
  • Discounts on business loans and lines of credit
  • Business credit cards
  • A personal bank account

Go ahead and nail down your needs. Then move on to step three.

Starting at $0/month, Lili offers a checking account with time-saving tax optimization and accounting features specifically built for entrepreneurs.

do you need a business plan to open a business bank account

3. Choose the right bank for you

With your list of needs and wants in hand, you can narrow down your choices and find the perfect bank for your business.

We recommend you use our rankings of the best banks for small business , where we help you easily compare your options. Some small-business owners also find that their local credit union has the best deals, so you can look into that as well.

But however you go about choosing, make sure you fully understand all the fees associated with your account. You don’t want surprise transaction fees blowing your budget, after all.

Compare the top online small-business banks

Data as of 2/23/23.  Offers and availability may vary by location and are subject to change. *Waivable with a balance of over $500

4. Gather all the documents you’ll need

Now that you know which bank you want to open an account with, you’re almost ready. But don’t march down to the bank just yet—make sure all your paperwork is in order first.

For most banks, you’ll need to have your employer identification number (EIN), your social security number (SSN), your business license, and your articles of organization (or any other business formation documents you have).

Some banks will require other documentation, so check what your bank of choice asks for before you apply.

If you don’t already have an EIN or articles of organization, now would be a good time to get those. Some banks are wary of unofficial businesses. So if you haven’t already filed all the paperwork to make your business legal and legitimate, go ahead and take care of that before you try to open a bank account.

5. Open your business bank account

Now that you know what kind of business bank account you want, which bank you want it from, and you’ve got your paperwork in order, you’re ready to apply for that account. With any luck, the bank will accept your application and bam! You’ve got yourself a new account.

Keep in mind that banks do sometimes reject applications for bank accounts. Usually, that rejection has to do with your past banking behavior. So if, for example, the bank looks you up on ChexSystems (kind of like a credit bureau, but for bank accounts instead of credit) and sees that you have a long history of bouncing checks or overdrafting your account, it might reject you.

But hopefully that won’t be a problem, and you’ll get that new business bank account without any trouble.

6. Use your new bank account!

Now you can get down to using and enjoying your business deposit account. Take care of business expenses. Pay people. Pay yourself! Deposit checks. Save money. Whatever it is you plan to do with that bank account, we hope you enjoy doing it.

And look, we don’t want to nag, but make sure you’re responsible with your business finances. If you prove to be a good business banking customer, you might find yourself eligible for more perks or opportunities through your bank. So take care of those bookkeeping basics .

do you need a business plan to open a business bank account

The takeaway

As you can see from the six easy steps above, opening a bank account is a relatively simple process once you know what you want. So what are you waiting for? Figure out your needs, go ahead and apply for your new bank account—and then use it to take care of business.

Interested specifically in a small-business checking account? Take a look at our list of the best business checking accounts .

Related reading

  • Online Banking vs. In-Person Banking—Which Is Better for Your Biz?
  • ChexSystems for Business Accounts: How It Affects Your Business Banking
  • How to Apply for a Business Loan Online
  • US Bank Small-Business Banking Review: Plenty of Options for Scaling Businesses

FAQs about opening a business bank account

Nope. Pretty much all banks require your social security number too.

Probably. Most banks have some kind of minimum deposit amount, but you’ll have to check with your bank of choice to find out its minimum. Some online-only banks let you open a business bank account without a deposit, but most traditional banks don’t.

But take heart; most minimum deposit fees range from $25 to $100. Pretty doable, right?

Need one? Not necessarily. Should have one? Probably. We explain in more detail in our article on whether you should get a business bank account .

At Business.org, our research is meant to offer general product and service recommendations. We don't guarantee that our suggestions will work best for each individual or business, so consider your unique needs when choosing products and services.

  • Board of Governors of the Federal Reserve System. " CA 21-6: Suspension of Regulation D Examination Procedures ." March 29, 2021. Accessed February 23, 2023.

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What you need to know about opening a business bank account

Opening a business bank account can give your business added protection, purchasing power and more..

April 27, 2023 | 8 min read

You've heard the saying about not mixing business with pleasure, but have you been applying that to your finances?

Opening a business bank account can help you keep your business and personal finances separate, and it may even limit your personal liability in company matters. Business bank accounts work similarly to consumer accounts, but they typically feature elements tailored toward specific business needs, such as seamless integration with business tools. The benefits they tend to provide are usually invaluable to business owners at all stages, whether you've just established a sole proprietorship or are a growing LLC.

If you're ready to streamline your accounting and tax processes, expand your business's purchasing power and more, then a business bank account may be your solution. Here's everything you should know before opening one.

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Benefits of a business bank account

The right business bank account should offer features and services that can help you efficiently run your business. It can also allow you to separate your personal and business finances, which can deliver some tax advantages and limit personal asset exposure.

A few unique benefits that business bank accounts may provide include:

  • Liability protection: Keeping your business finances separate from your personal finances should help limit your personal liability, especially if you operate an LLC or a corporation. If your business is found liable in a legal dispute, the risk to your personal finances may be lower when your personal account is not associated with your business earnings and expenses. A business bank account that offers merchant services may also provide protection for your clients by ensuring their information is secure. It's recommended that you consult a legal professional to determine what protections or benefits you should look for when considering a business bank account.
  • Streamlined tax and accounting processes: Conducting business through a designated business bank account usually means simpler, more accurate reporting come tax time. It may also make it easier for your accounting team to track your business expenses, identify valuable clients and develop important business reports, like cash flow statements.
  • Potential for expanded purchasing power: Some business bank accounts may offer access to a line of credit for your business. Lines of credit may boost your business's spending power by serving as a source of extra cash for your business , allowing you to better manage financial stress and allocate more resources toward expansion, product development or competitive marketing strategies ahead of a busy season .
  • Potential to establish business credit : If your business bank account offers a line of credit, using it may help establish credit for your business . Establishing and maintaining good business credit may broaden or improve the financial opportunities available for your business in the future, which may be a key step in planning for the growth of your business .

Types of business bank accounts

There are several different business bank accounts for you to consider, each with its own benefits, features and considerations, which may vary between financial institutions.

Checking accounts

Checking accounts for businesses are similar to common personal accounts. They typically allow you to make deposits and withdrawals, write checks, make wire transfers and use a debit card for the account to make purchases or withdrawals. They are also usually FDIC insured for up to $250,000.

Advantages:

  • May offer introductory or promotional periods with additional benefits
  • May integrate with other business tools, like accounting software
  • May pay out interest on your balance

Considerations:

  • May have monthly account maintenance fees
  • May require you to maintain a minimum balance
  • May have fees for large transaction volumes, deposits over a certain amount or early account termination

Savings accounts

Savings accounts for businesses are also similar to consumer savings accounts and are typically FDIC insured up to $250,000.

  • Earn interest on your savings account balance
  • May not have transaction limits, as federal laws limiting business savings accounts to 6 withdrawals per month have ended
  • Can be linked to your business checking account to prevent overdrafts
  • May require a minimum balance to earn interest
  • May have withdrawal limits, depending on financial institution
  • May have monthly maintenance fees

Merchant services accounts

Merchant services accounts allow your business to accept and process debit and credit card payments. Merchant services accounts are linked to your primary business bank account, and they verify funds before depositing them into your primary account. They charge a fee per transaction, usually a percentage (such as 1.5% or 3.5%) of the transaction amount.

  • Verify that customers have enough available funds to cover their purchase
  • Protect sensitive customer information, providing extra security
  • Allow you to accept a popular payment method, potentially improving revenue and customer satisfaction
  • May have setup, monthly, annual and incidental fees, like chargeback or statement fees
  • May have a processing time that delays access to your money, which may range from a few hours to a few weeks depending on the payment processor
  • May need strong business creditworthiness or high net worth to be approved for a reliable merchant services account

With each of these accounts, the terms will presumably vary by the financial institution. Consider consulting different banks to get information on their account fees, interest rates, account limitations and minimum balance requirements. Explore Capital One's business banking solutions to learn more about different types of accounts available for businesses of all sizes.

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How to open a business bank account

With the right documents, opening a bank account for a business is generally a simple process. The first step is deciding which bank you want to use, then going to their website or local branch to apply.

What documents are required to open a business bank account?

There are several documents and pieces of information you may need to open a business bank account. These include an employer identification number (EIN), your business license, your business’s formation documents and your business’s ownership agreements. Some banks may require additional information to open a business bank account. 

At Capital One , applicants should have the following basic information when applying for a business bank account:

  • Personal information, like name, date of birth and Social Security number
  • Contact information, including phone number and email address
  • U.S. address (not a P.O. box) and owner establishment date
  • Legal name and type of business
  • Business establishment date with signer’s full name
  • Ownership structure and number of employees
  • Percent of ownership and annual gross revenue

Learn more about the application process and see what other documentation you should bring based on your business structure.

1. EIN number

Your business's federal employer identification number (FEIN, also known as an EIN or tax identification number) is essentially its Social Security number. Sole proprietorships and single-member LLCs with no employees may not need an EIN. If your business doesn't have an EIN, you may be able to use your personal Social Security number to open a business bank account.

Not sure if your business needs a FEIN? Visit the IRS’s website to find out.

2. Business documents and information

Information needed to open a business bank account often includes your business address, your business trade or doing business as (DBA) name and your business's entity type. Different entities often need different documentation to open a business bank account, alongside their EIN and basic personal information.

  • Sole proprietorships typically need their business license and business name registration certificate.
  • Partnerships (including general partnerships, limited liability partnerships and limited partnerships) typically need their business license and business name registration, plus a signed and dated partnership agreement and/or certified evidence of registration with the secretary of state.
  • LLCs typically need their business license, a signed and dated operating agreement and a certified certificate of organization.
  • Corporations typically need their business license, corporate bylaws and certified articles of incorporation.

3. Initial deposit

A business bank account often requires an initial deposit at account opening. The amount of the initial deposit may vary by financial institution and account type (for example, a business savings account may require a higher initial deposit than a business checking account). Most initial deposits range from $5 to $1,000 and may align with the account's minimum required balance. 

Work with your local banker to discover which business account works best for your needs and has an initial deposit amount that you can comfortably manage. Some financial institutions may even waive initial deposits or contribute to them for qualifying accounts or as part of an introductory offer.

Why should you open a business bank account?

As a business owner, you've got a busy life. Between adjusting pricing strategies and maintaining positive client relationships, there isn’t much room for sorting through scrambled finance sheets or mixed expenses.

A business bank account may make your life easier by separating your personal and business finances. Plus, features like card payment processing, access to a business line of credit and integration with other business tools may add value and save time for your business.

At Capital One, each business is unique and deserves unique banking solutions. Capital One's small business products and services offer convenience, control and exceptional perks, like virtual cards and next-day access to card payments. Explore Capital One's business banking products to see what options are available for your organization.

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15 Questions to Ask When Opening a Business Bank Account

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The offers fly at you from all directions: internet pop-ups, TV ads, radio spots, and even old-fashioned USPS mailers. Banks want your business and are offering to pay you for the privilege.

But if you are running a startup or own a small business—even if you just need another bank account to manage your side hustle—you already know the devils that can reside in the details. You know you’ve got some homework to do and some questions to ask before opening a business bank account.

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The first question you should ask yourself is whether you need a business bank account. For some entrepreneurs just starting, a separate business account may not seem necessary. But having one provides lots of advantages, including:

  • A cleaner way to manage cash flow and keep track of your day-to-day revenues and expenses.
  • A tool to stay organized and comply with tax laws and regulations.
  • Protection of your personal assets from liability in the event of a lawsuit.
  • A more professional appearance to customers and vendors.
  • Potential access to lines of credit, which can be helpful in times of financial need.
  • Structure for when (not if) your business grows.

So, assuming those advantages make the process of opening a business bank account worth it, what are the key questions you need to ask to make the right choice?

Well, first, look at your own needs and characteristics. What are your banking needs?

It’s doubtful that any one bank will have the suite of products — debit cards, checking accounts, savings accounts, etc. — and the fee structure that fits every business. So, assess your business profile and banking needs first.

That means the size of your business and the industry you are in. And it means your future outlook, whether you anticipate staying about the same size you are now for a few years, or whether you forecast rapid growth and will need a bank that can accommodate your expansion.

Put together a thumbnail profile of your company. Take a swing at the banking needs you have now and will have in the near future. And then go bank shopping. Here are 15 questions you should ask:

What Competitive Products and Services Does the Bank Offer?

The size of your business and the industry you are in will help determine what type of products or services you need. Whether you are looking at a traditional bank, credit union, or online bank, you likely will need more than the basics: checking account, savings account, debit and credit cards.

A small retailer may need only a merchant account or a small business checking account, for example. A large manufacturer, however, might be looking for help with everything from treasury management to retirement plans.

Remember to keep an open mind toward future needs. You may not need budgeting tools or direct deposits now, but one day you will. You may not take debit cards now, but one day you will. Don’t shoot for the moon; most small businesses won’t need trade finance services. But consider an account that has the products and services you need now as well as one that can grow in complexity as you grow.

Here are some of the products and services banks offer:

  • Business Checking Accounts: These are specifically tailored for businesses. Features may include no minimum balance requirements, online banking, and mobile banking. All should offer the ability to make multiple transactions.
  • Business Savings Accounts: Allow you to earn interest on the cash you don’t need at the moment for operations but provide quick access to those funds.
  • Business Loans: These loans could be for working capital, to finance equipment or other investments, commercial real estate needs, etc.
  • Business Credit Cards: For use with your business expenses, these credit cards may offer rewards, expense tracking, and other benefits.
  • Merchant Services: Payment processing solutions that you will need depending on how you get paid by your customers. This would include credit card processing, online payments, and point-of-sale systems.
  • Online and Mobile Banking: Allows for convenient and immediate account management, such as accessing information and executing transactions.
  • Cash Management Solutions: Helps you manage cash flow, collections, disbursements, and investments.
  • Treasury Management Services: The larger you are the more likely you will need these kinds of services, which help businesses optimize financial operations. Think forecasting, risk management, and liquidity management.
  • Business Insurance: Some banks will partner with insurance companies to offer coverage against property damage, liability, and business interruption.
  • Trade Finance Services: Letters of credit, export financing, and foreign exchange services, for those businesses more heavily involved in international trade.
  • Business Advisory Services: A banker or team of bankers that can offer strategic guidance and assist in decision-making.
  • Corporate Banking Services: For large businesses with complex needs. Think cash management for multinational companies and large-scale financing solutions.

What Enticements or Introductory Offers Are Available?

While not as common as rewards for consumer bank accounts, online banks and brick-and-mortar banks do offer incentives from time to time to businesses that open a new account. They pay you to give them your business, as we said at the start of this article. So, don’t forget that your business is valuable.

Check out what different banks or credit unions may offer as incentives to attract new customers. Some common enticements include cash bonuses, fee waivers, savings rates that exceed the market rate, and free checks or overdraft protection. See if the banks or credit unions that interest you offer rewards programs.

You are largely in the driver’s seat as a potential new customer, which won’t always be the case with most banks. But you will have to measure the value of any incentive against other factors, like initial deposits, minimum balances, or transaction fees, as well as the products and services the account provides. The availability of incentives and promotions can vary over time as well. And, always, always, always read the fine print: Incentives are generally subject to certain terms and conditions.

Here are a few examples of banks offering rewards, bonuses, or other incentives to open an account:

  • Chase for Business: “When you open a Chase Business Complete Checking® account. For new business checking customers with qualifying activities.”
  • Bank of America Small Business: “Open a new Bank of America business checking account and qualify for a $200 cash bonus … when you make and maintain Qualifying Deposits.”
  • U.S. Bank Busin e ss Checking: “Boost your budget with up to a $750 bonus. Open a new U.S. Bank Business Checking account and complete qualifying activities.”

Again, review the specific details of each offer and compare the features and benefits of different business accounts. Keep in mind that some enticements may come in other forms, such as fee waivers, savings rates that exceed the market rate, or free checks or overdraft protection.

Almost assuredly there will be some minimum balance requirement to earn and keep the reward, and most accounts will have some fee schedule, which brings us to our next set of questions:

Is There a Minimum Balance Requirement?

Banks want your business because they want your money to work with. They offer both the carrot and the stick to persuade you to hold as much of your money as possible in one of their checking or savings accounts.

The carrot can be cash bonuses as we discussed above, or other incentives such as higher interest rates of return. The stick can be minimum balance requirements that penalize you if you go below the specified amount.

For example, one of the conditions (there are others) of the Chase for Business cash offer above is that you need to maintain at least a $2,000 balance for 60 days from the offer enrollment.

Before you act, find out what balance requirements come with your account and what penalties you may incur should you dip below that figure.

What Are the Fees and Requirements?

This is a companion to the previous question. You will need to find out what the fee schedule is for the account you are considering and prepare to manage your account to that requirement. Just as you manage expenses in your overall business, you will need to control expenses within your banking environment.

Those expenses can be any type of service fee, from a monthly service fee to monthly maintenance fees, transaction fees, or ATM fees. An overdraft fee or two can wipe out any interest you have earned on the account.

The U.S. Bank Gold Business Checking Account Package , for example, comes with a $20 monthly maintenance fee and the first 300 transactions are free each month. That may seem like a small amount, but until you do the math and really look at your needs (the number of monthly transactions your business makes, for example), you won’t have a strong sense of the potential cost.

(Note: U.S. Bank, like many banks, gives customers a chance to have their monthly maintenance fee waived if they hit certain targets for total funds on deposit. Always ask whether and how you can mitigate or eliminate such fees.)

Most banks find ways to levy charges. Balancing lower fees versus certain benefits is just part of the banking experience. So, be sure to ask about the fees of different banks and find out how you can lower or avoid them.

How Simple Is It to Withdraw Money From Your Account?

Here we mean the mechanics of the bank account. We are not talking about harvesting cash from your business or paying yourself or any other questions that may or may not involve the accounting of the business or tax laws or tax management.

We just mean, how easy is it to manage your account, including withdrawals, when necessary. And it’s an important question to ask because some bank accounts will limit those transactions.

When assessing this question, ask yourself what the cash needs of your business might be. Banks limit debit card use far more strictly than banking transfers, for example. So if you need to withdraw money from the account and can do that by setting up transfers among accounts, that likely will be a smoother process. But if you need to be taking out cash using your debit card, you will run into limits on both the number of transactions and the amount of money you can take out per day, week, or month.

M&T Bank, for example, limits ATM/cash withdrawals to 9-15 withdrawals a day, or $500-$1,000 maximum per day, depending on the type of card. Chase limits the amount of spending on a business debit card.

And, if you want to withdraw all your money, some banks will charge a termination fee depending on how long you have had the account with them.

These rules may serve the interests of the bank, to be sure. But they also protect against theft, fraud, and loss. Your job is to research the spending and withdrawal limits to find what’s best for your business.

What Are Minimum and Maximum Transaction Limit Amounts?

Like the withdrawal question above, the matter of transaction limits will vary by account.

In some cases, the limits will be strict. You cannot make a transaction for less or more than a certain dollar amount. Or, you have a certain number of transactions per day, week, or month, and that’s it. The bank will not allow you to conduct more of that type of transaction until the calendar flips.

In other cases, the limits apply only to the number of free transactions. You can keep making the transactions you need, but you will pay a fee if you go over the certain number set aside as free.

So, assess whether you will need to make large or very small transactions, and check what the account will allow. And assess whether you will make just a few transactions a month, or many. You may need a bank that is generous with transactions, such as First Internet Bank , which promises unlimited transactions.

Can You Have Multiple Signatories?

Bank practices regarding multiple signatories have changed over time. Today, most bank practices are less strict than they used to be, which can be a good thing or a bad thing.

Having multiple signatories on the business checking account and being able to make payments or write checks, for example, can make you more efficient and provide some convenience. But the more hands with access to the till, the more risk your business runs. You should discuss with banking candidates what safeguards they offer and understand what internal controls you will want to set up to protect your business.

When opening an account, the bank will likely ask you to declare who are the people–the signatories, that is–who are authorized to access and manage the company bank account. Depending on the size of the company, this could be a single person, a pair of partners, or multiple people in a larger firm.

Those people will be permitted to act on behalf of the company. They can add or remove other people from the account. Make payments, withdrawals, and deposits, etc. People not on the list, even if they work for the company, will not have access to the account. This list, often called a bank mandate, makes clear to the bank and the people within the business who can do what.

One important thing to note: How the bank sets requirements can differ. The bank can set up the framework that a business can use to protect itself. But, ultimately, the enforcement of some security measures will reside with the business, not the bank.

If you want your bank’s checks to always require two signatures, for example, the bank can set up multiple signatories but may not necessarily enforce the need for two signatures on the checks themselves. Your internal policies and procedures will need to provide that protection.

Is the Business Bank Account Interest-Bearing? 

Do you expect to have a stash of cash available? Find out what accounts the bank offers that pay interest. Most of the time, if you are looking to earn interest on your excess funds, you will need to check out business savings accounts. As with most saving accounts, a strong interest rate would make this option attractive. 

Your business is valuable. Competition can be keen for customers like you looking to open other accounts or switch banks or credit unions. Check out whether the banks you are looking at offer savings rates that exceed the market rate.

What Types of Loans Does the Bank Offer?

Banks offer a variety of loan options, depending on the customer.

A Business Line of Credit, for example, is not a small business loan, though there are similarities. This provides a revolving line of credit for business accounts at financial institutions. It can help manage cash flow gaps or fund short-term needs as you try to reach your financial goals.

Term loans are repaid over a fixed period, usually short-term, up to five years.

SBA loans are loans guaranteed by the Small Business Administration. This makes them more attractive to lenders because of the lower risk.

Microloans are small, short-term loans. Often, businesses that fail to qualify for traditional bank loans will take advantage of microloans.

Will You Be Assigned a Dedicated Banker?

Depending on the size of your business, your needs, and the amount you bring to the account, some banks may offer your business a dedicated banker. A banker who specializes in working with businesses can be a valuable asset, helping you with everything from opening an account to applying for loans, to managing cash flow.

The key here is for you to first assess your needs. If they are complex enough to require the assistance of a dedicated banker, find out which banks offer that option.

Does the Bank Have a History of Working with Clients in Your Specific Industry?

The size and industry of your business can affect the type of traditional bank, credit union, or online bank you need. A small business in the retail industry may need only a merchant account or a small business checking account, while a large business in the manufacturing industry might need help with everything from treasury management to retirement plans.

You should find out whether the bank you have in mind has experience of working with businesses like yours. That will be an advantage as you build.

Does the Bank Have Online Banking and a Mobile App?

In comparing various banks and credit unions to find those that meet the needs you outlined, consider the importance of online banking. Banks that offer a variety of mobile banking services, such as bill payment, funds transfer, mobile apps, and other digital tools, provide convenience and immediacy that is not tied to the hours of a brick-and-mortar bank. In the same way, check out whether the bank offers online customer support. Also, ask about charges like ATM fees.

What Amount of Your Deposit Is Covered by Insurance?

The Federal Deposit Insurance Corporation (FDIC) insures deposits in banks up to $250,000 per depositor. Check the Terms and Conditions of the bank you are considering. There the bank will likely refer to the FDIC in outlining how your deposits are insured if the bank fails, for example.

Credit unions may refer to the National Credit Union Administration. Check with the credit union you are considering, if you are considering a business account at a credit union, to learn how much of your deposits are insured.

The Terms and Conditions also will outline what and how the bank will protect you and your business’s assets, data, and privacy. And here you should be able to find all the details on account types, minimums, fees, transaction limits, etc.

Does the Account Integrate with Your Accounting Software ?

If you use accounting software in your business, look for a financial institution that goes beyond the basics and offers integration with the software of your choice. This could make your cash management a lot easier.

Is the Bank Capable of Growing Along with Your Business?

If you plan to grow your business in the future, you’ll need to choose an account that can accommodate the growth. For example, you may not need budgeting tools or direct deposits now, but one day you will. And if you don’t take debit cards now but plan to accept debit cards in the future, you’ll be served by choosing an account that covers that now.

Choosing the Right Bank for Your Business Account

Opening a business bank account is not only an important step in your entrepreneurial journey, but it’s also an exciting one. It means you are ready for those revenues to start flowing in. But regardless of whether you’re starting a side hustle , launching a full-fledged business, or building an existing business, you need to make sure you have the services you need to be smart and careful in handling your finances. 

We hope these questions help you assess your banking needs, understand how to choose the right bank for a small business, and know what questions to ask before opening an account.

Can I open a business bank account if my business is not yet registered?

A: Depends on the bank. Some will allow a bank account to be opened before a business is registered, or while the registration is in process. Others do not.

Can you have multiple business bank accounts under one business name?

Yes! Some banks allow multiple business bank accounts under one business name. Some businesses take advantage of this to keep different types of funds separate, such as operating expenses, payroll, and marketing expenses.

Be sure to ask whether this is permitted and, if so, whether the bank charges extra fees for the privilege.

How long does it take to open a business bank account?

Expect it to take a few days. But it depends on the financial institution. And it greatly depends on how prepared you are going into the application process.

The more documentation you can collect ahead of time, the faster the process will go. There are benefits to applying online (convenience) and applying in person at a brick-and-mortar branch (personal touch). In either case, the process should go smoothly.

The real-time it takes will be collecting the proper documents, such as your business name registration certificate; your business license; your Employer Identification Number (EIN); your Social Security number (if you are a sole proprietor); your business’s formation documents (articles of incorporation, partnership agreement, etc.); and all the personal identification you might need.

Can you transfer funds between your personal and business bank accounts?

Check with the bank to understand how they handle transfers. Also, as we said above, some issues like this will be determined by company policy rather than bank policy. Keep in mind that business accounts provide a separate financial entity for your business and a cleaner way to manage cash flow than your personal checking account.

By keeping business funds separate from your personal funds, a business account helps to protect your personal assets from liability in the event of a lawsuit. It also keeps your personal finance setup cleaner.

Can you close your business bank account if your business closes down?

Yes, but you will need to prepare the proper documentation and complete the proper steps, such as paying off any outstanding debts on the account and transferring any remaining funds to another bank account.

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How To Open a Small Business Bank Account: Everything You Need to Know

Katherine Galanova

Katerina Galanova is a freelance writer and actor from Albuquerque.

Starting a business can be life-changing. It also takes intense planning, organization, and a lot of hard work. The financial details involved can be especially tedious, not to mention confusing to navigate on your own.

For example, you’ve probably heard that you should open a separate business bank account for all your business expenses. But what if it's really small — say, a part-time side hustle ? Isn’t that more trouble than it's worth? (Spoiler alert: Yes!)

Let’s examine who needs one, why you might want to open one, and — finally — the intricacies of how to open a business bank account.

Should you open a separate business bank account?

Here’s a common myth: if you operate any kind of business, you need a business bank account. This advice is even given to freelancers, independent contractors , and gig workers — people who technically qualify as “small business owners” for tax purposes, but might not feel like it.

The advice comes from a good place, but it’s often applied too broadly.

When you might not need a separate bank account

If the only reason you want a separate account is to track your business expenses for tax write-offs, there are easier ways to do that. For example, you can use Keeper .

The app can sort through your purchases and note all your write-offs for tax time, even if you have personal expenses jumbled in the same account.

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That said, if you have a bigger business — especially with employees of your own — getting a business bank account is a very good idea.

Reasons to open a business bank account

A business bank account can be a bit tricky to open, but it’s worth it for businesses that:

  • Have more complicated finance
  • ‍‍‍Involve multiple people

Here’s a checklist of questions to ask yourself when figuring whether you need one:

✓ Is your business big enough to warrant it?

As we’ve previously stated, super-small businesses — especially sole proprietors — don’t really need the headache of opening a new business bank account.

However, once you start dealing with hundreds or thousands of customer payments per month it’s probably time. The same goes if your business needs to pay more than just your own salary.

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✓ Do you need extra liability protection?

Business bank accounts are more than just a safe place to stash your business income. They also help you keep your personal and professional finances separate. That helps you limit the risk you incur if your business gets sued.

If you have a business entity like an LLC or corporation, you’ll want to keep your personal savings separate from your business’s funds.

Blurring the lines between them can open you up to personal liability in your business dealings. Why? You’ve essentially pierced the “shield” that stands between you and your company and establishes you as separate legal entities.

✓ Do you need to accept credit card payments?

While there are services that make it easier for small businesses to accept credit cards, these naturally come with extra fees on top of the standard ones.

If you’re dealing with a lot of credit card transactions, being able to handle them without the middleman can save you big time. You can do this with a merchant services account, which we’ll cover below!

✓ Are you going to need business loans in the near future?

Establishing a business bank account before you need a loan means that you’ve already started building a relationship with your bank. That makes it more likely that they’ll say yes when you decide to ask them for money.

✓ Does anyone else need access to your business funds?

From business partners to sending an employee out to buy the office coffee , a business bank account allows for multiple people to use company funds.

✓ Who’s going to see your business account?

It might seem vain, but having a business name on your credit card can help lend your work legitimacy when you’re dealing with other companies.

We wouldn’t recommend opening one just for this reason, but if you’re already leaning toward the idea, the added level of professionalism is a nice perk.

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What to look for in a business bank account

When opening a business account, the first most important step is choosing which bank is best for your small business. You may be tempted to hop down to the same bank where you do your personal banking, but don’t get in the car just yet!

Business accounts have unique needs. Just because you’ve had no complaints using your personal bank account, that doesn’t mean the bank’s business options are worth it.

Choosing the right account is tricky, which is why we compiled this list of the 14 best banks for small businesses . You'll find traditional banks, credit unions, online banking options , and more.

For now though, keep an eye out for these features when you look for the right bank:

  • Low (or no) monthly maintenance fees
  • A respectable Annual Percentage Yield (APY)
  • Low interest rates on loans and business credit cards
  • Perks on business credit cards

Once you’ve covered those basics, you’ll need to consider the needs of your particular business.

For example, do you take in a high number of monthly purchases? If so, you’ll need to make sure there’s no cap on how many deposits you can make in a month.

Or are you more boutique, offering high-priced services for a few clients a month? In that case, a bank that lets you get the most out of your APY would be a good choice.

What type of accounts are available to businesses?

There are three main types of business bank accounts available, though not every financial institution offers all these options.

Business checking account

If you’re only going to have one type of business account, this is probably it. It allows you to write checks, use a debit card, and still save money — many business checking accounts even generate interest! All these features make it a good all-around choice.

Business savings account

Just like a personal savings account, this option is great for growing your business revenueThe main difference from a checking account: it won’t help you with payments or purchases.

These often come with higher interest rates than checking accounts, so you’ll want to keep your long-term assets here.

Merchant account

This is the kind you’ll need if you’re planning to process credit card payments directly from customers. Merchant accounts also offer consumer protections, such as fraud detection and chargebacks, giving your business an air of legitimacy and allowing your customers peace of mind.

What do you need to open a business bank account?

If you're planning to open a business bank account, there are a few things you’ll need to have with you. Whether you apply online or in-person, expect these docs to be part of your application process.

Identification documents

The first thing a bank will want to know is who is applying for the account.

IDs for yourself

Banks require new customers to hand over proof of identity to open an account or deposit funds — especially if you don’t have a personal account established at their location.

Acceptable forms of personal identification include:

  • A driver's license

IDs for your business

Your bank will also need identification for your business.

If your business has an Employer Identification Number (EIN), you’ll need the documentation from the IRS confirming that.

If you’re a sole proprietor and don’t have an EIN, don’t worry! You can use your personal Social Security Number.

Business formation documents

If you’ve registered your business as an LLC or classified it as an S corp or C corp, bring the documentation to the bank as proof.

Ownership agreements

If your business has a sole owner (aka, just you), but is something other than a sole proprietorship, your business articles of incorporation would denote that.

If it’s a partnership, you’ll need a partnership agreement to delegate owner rights and responsibilities. (The last thing a bank wants is co-owners squabbling over their finances!)

Business license

Depending on the nature of your business, your state may require you to get a business license. If you need one, bring it to the bank!

A business license is just permission from your state (or municipality) to operate a business. Not all types of businesses require it, and the stringency of the requirement varies from city to city and state to state.

For example, Nevada requires all contractors working on 1099 to purchase a business license. This isn’t the case for many other states, though.

Note: Licensing requirements vary depending on your industry, not just your location. If you plan to operate a business that involves handling food or selling firearms, special licensing is almost always required.

“Doing Business As” certificate

Some states require you to fill out a Doing Business As (DBA) form if you conduct business under a name that’s not your own.

You can get a DBA from your town or city hall, and the filing fee is usually less than $100. Some states even allow you to register online.

How much money do you need to open a business bank account?

Opening and minimum balances vary greatly from bank to bank. However, on average, if there is an opening balance, it’s only about $250.

Minimum balances can get a lot higher — even up to $15,000. But most of the time, those “minimums” are the required amount to avoid things like limits on the amount of deposits you can make in a month. They’re not strictly required to keep the account open.

As long as you can keep enough to pay your bills and banking fees , there’s no reason you cannot apply for the account! Many businesses start small and grow from there. If your bank doesn’t understand that, they might not be the fit for you.

Can you open a business bank account without an LLC?

Yes! LLCs have their advantages, but they’re not required for business bank accounts.

Whether or not to start an LLC is a nuanced decision that every business owner needs to make for themselves. They offer protections, but also come with more burdens. So whatever you do, don’t feel like you need to register for one just for a bank account.

Opening a business bank account can help formalize — and professionalize — your new business. At the end of the day, that’s great for your business image.

If you plan on opening a business account, just remember to have all your papers in order, and be patient. The first bank you approach may not approve your account, so just keep trying until you find the right financial partner for you!

Katherine Galanova

Katherine Galanova

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How to open a business checking account

Find out what you need to open a business checking account and how to get started.  Presented by Chase for Business .

do you need a business plan to open a business bank account

As a business owner, you undoubtedly have a lot on your plate, and sometimes it may feel a bit overwhelming. But keeping track of your business expenses doesn’t have to. A business checking account can help you easily separate and manage all your business expenses and deposits. By being prepared and knowing exactly what is needed to apply to open the account, you’ll be up and running in no time.

Who can open a business checking account?

The type of business ownership you have dictates who needs to be present when opening a business checking account. Use the list below to understand who will need to be available so there are no surprises. Keep in mind: In addition to the individuals below, all authorized signers to the business account must also be present when opening an account in person. You can also open many accounts online, however the same individuals may need to be available to provide information or to sign documents electronically.

  • Corporation: President, Secretary, Assistant Secretary or Acting Secretary (for non-profit corporations, a minimum of two non-voting board members is required if there are no voting members)
  • LLC: all Members or Managers (If one of the Members or Managers is another business, an authorized representative of that business must also be present)
  • Partnership: all General Partners (if one of the General Partners is another business, an authorizing representative of that business must also be present)
  • Sole proprietorship with one owner: only the owner
  • Spousal sole proprietorship: both owners
  • Sole proprietorship living trust: the trustee(s)
  • Sole proprietorship with a power of attorney: only the agent
  • Unincorporated Business Association or Organization: either Secretary or Acting Secretary

What information is needed to open a business checking account?

When applying to open a business checking account, you’ll need to give the bank some basic information about your business, most of which you likely already know, including:

  • Business address
  • Business phone number
  • Nature of your business
  • Number of locations
  • Number of employees
  • Annual sales in dollars
  • Where products and services are sold
  • Locations of suppliers and vendors
  • Types of transactions and volumes you expect to process through your new business checking account

What documents are required to open a business checking account?

Before speaking with a business banker, make sure you have all the required documents. Below are the minimum requirements of information you’ll need to apply to open a Chase business checking account , but the requirements are typically the same for any business checking account.

Personal identification

You’ll need two forms of identification, and one of them must be a primary government-issued ID. If a person with power of attorney is opening the account, they must also provide the owner’s personal ID or a photocopy of the owner’s personal ID.

Primary government-issued ID examples:

  • For U.S. citizens: state-issued driver’s license, state-issued ID card, passport
  • For non-U.S. citizens, permanent residents: Permanent Resident Card (green card)
  • For non-U.S. citizens, non-permanent residents: passport or Matricula Consular card

Secondary ID examples:

  • For everyone: credit or debit card with embossed name, employer identification, utility bill

Tax identification number

You also need one of the following tax identification numbers to open a business checking account:

  • Social Security number
  • Individual taxpayer identification number (for non-U.S. citizens)
  • Employer Identification Number (EIN)

Business documentation

Other types of documents you’ll need will vary depending upon the state where the business is located.

If you’re doing business as another name, one of these documents may be an Assumed Name Certificate, also known as a Trade Name Certificate, Fictitious Business Name Statement or DBA. You may also need to provide your assumed name application or filing receipt, copy of the published newspaper entry announcing your formation or your business license.

NOTE: This type of certificate isn’t required for businesses in Alabama, Alaska, Hawaii, Kansas, Mississippi, New Mexico, South Carolina, Tennessee, Wisconsin and Wyoming; for sole proprietors operating a business using the owner’s last name in California, Indiana, Kentucky and Texas  or for Nonprofit Unincorporated Business Association or Organization in CA .

Open your business checking account today

Once you have all the documentation and information you need, you can apply to open a business checking account in no time. Speak with a business banker to determine which type of account is best for your needs.

This article is for Informational/Educational Purposes Only: The opinions expressed in this article may differ from the official policy or position of (or endorsement by ) JPMorgan Chase & Co. or its affiliates. Opinions and strategies described may not be appropriate for everyone, and are not intended as specific advice/recommendations for any individual or business. The material is not intended to provide legal, tax, or financial advice or to indicate the availability or suitability of any JPMorgan Chase Bank, N.A. product or service. You should carefully consider your needs and objectives before making any decisions, and consult the appropriate professional(s). Outlooks and past performance are not guarantees of future results. JPMorgan Chase & Co. and its affiliates are not responsible for, and do not provide or endorse third party products, services or other content.

JPMorgan Chase Bank, N.A. Member FDIC. ©2023 JPMorgan Chase & Co.

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If you’re starting a business, you’re going to need more than business cards for prospective customers to take you seriously. That’s where a business checking account comes in. Opening a business checking account is an essential step on your path to success. It will help you manage your cash flow and build a valuable relationship with a bank that may eventually help your business access credit for growth.

“Setting up a business checking account ultimately helps clearly separate your business and personal funds, provides more protection to your personal assets and makes it easier to keep track of your business expenses throughout the year for tax purposes,” says Tony Pica, senior vice president at Capital One.

What do I need to open a business checking account?

Opening a business checking account isn’t as simple as opening a personal checking account. You’ll need to have proper documentation, which will vary based on the type of your business.

“The documentation required to open a business account may depend on the structure of your business,” Pica says. “For example, a sole proprietor needs their federal tax ID number (TIN) letter and business license or fictitious name certificate, while an LLC or corporation also needs beneficial owner information and certificate of good standing.”

Your documentation requirements may vary based on where your business is located, too.

“Every state has its own set of rules for each structure [of a business], so talk with your trusted advisors, such as a business lawyer or accountant, to ensure you’ve compiled all of the necessary personal and company information,” Pica says. “This is a key step to make the process go as smoothly as possible.”

Here’s a rundown of the most common materials needed to open a business checking account:

  • Two forms of identification
  • Your tax ID number (TIN)
  • Business documentation (Certificate of Good Standing)
  • Assumed name certificate
  • Beneficial owner information
  • A solid understanding of your business plan

1. Two forms of identification

You’ll want to bring a government-issued ID – your state driver’s license or your passport will do – plus another piece of ID such as a credit card bill or a utility bill with your name listed on it.

2. Your tax ID number

Your business isn’t official until it’s registered to pay its fair share to the government. Make sure you have applied for your federal tax ID number, which is also known as your employee ID number (EIN), with the IRS.

3. Business identification documents

In addition to dealing with the federal government, you’ll need to get in touch with officials in the state where your business is headquartered to verify the legal existence of your business. That will likely entail registering your business with state and local governments to acquire a business registration certificate and applicable licenses.

If your business is a corporation or an LLC, you’ll likely need a Certificate of Good Standing. This shows that you’ve paid all the necessary fees and checked all the boxes, and it is typically secured through a Secretary of State’s office or a state’s Division of Corporations. The bank may also ask for meeting minutes, by-laws or other articles of incorporation.

4. Assumed name certificate

This item typically applies to sole proprietors and limited partnerships. Let’s say your name is Tim Ryan, but you are planning to operate as “Tim Ryan Painting.” That’s your assumed name, which might also be referred to as DBA (doing business as), a fictitious name or a trade name certificate. This typically applies to sole proprietors. You will likely be able to obtain this through your county clerk’s office.

5. Beneficial owner information

Banks are required to know who has an ownership stake of 25 percent or more in your company, which is the magic number that makes you a “beneficial owner.” If you own the business with someone else, you’ll need to determine how much equity each of you has in the company. Your bank will likely have you complete a simple form.

Like personal checking accounts, many business checking accounts require a minimum deposit to open. That amount will vary by bank. At Wells Fargo , for example, you only need $25 to open a business account, while U.S. Bank requires a minimum deposit of $100.

7. A solid understanding of your business plan

Be prepared to share a detailed overview of the nature of your business, expectations of your annual sales, where your suppliers and vendors are located and other information to establish your business’s credibility.

Choosing the best business checking account for your needs

Business checking accounts share one key thing in common with personal checking accounts: There are a lot of options. To find the best business checking account , think about what kinds of services you need. Will you want to send branded invoices? Do you plan to give other leaders of the company the ability to sign checks? Are you hoping to connect your account with software like Quickbooks or NetSuite? Will you need to visit a physical branch to make deposits, or could your business function easily without in-person interaction with a teller?

There are a number of business checking accounts for new businesses that offer low or no fees for owners in the early stages. Those accounts just include the basics: a place to park your money, a debit card and not much else. To take advantage of an account with expanded features while avoiding fees, though, you may need an accurate forecast of how much money you’ll be earning and spending on a regular basis.

For example, consider Bank of America’s two business checking options: Fundamentals vs. Relationship. To avoid the $16 monthly fee on the Fundamentals account, you need to spend $250 each month on a business debit or credit card and maintain a monthly balance of $5,000. The Relationship account offers bigger benefits such as no-fee stop payments, no-fee incoming wire transfers and the ability to customize access for employees, but it comes with a higher $29.95 monthly fee. Avoiding that extra cost carries a much taller order than the Fundamentals threshold: a monthly balance of $15,000.

Some other big banks such as Capital One have a similar model: lower-priced business checking accounts in exchange for fewer features.

“Before you open a business checking account, do your research,” Pica says. “Shop around and see what kind of offerings are available in the market for small businesses. Consider fees, interest, transaction limits, cash deposit limits, account maintenance requirements and access to digital business banking tools.”

— Bankrate’s René Bennett contributed to an update of this story.

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  • Legally protecting yourself in case of an audit is the No. 1 reason to use a business bank account.
  • Different banks will offer different levels of convenience, and they'll come with different fees.
  • Fraud detection and other security features are especially important for protecting your business.

Insider Today

When starting a business, it can be overwhelming thinking about all the things you need to do and consider. However, it is essential that you do not overlook the value of opening a business bank account — usually both a business checking account and a high-yield business savings account .

As a CPA and financial planner, one of the first things I tell all my business owner clients to do is to keep their personal and business transactions separate. While there are a multitude of reasons you should have a separate bank account for your business, legal protection is certainly the most important.

If you experience an audit, it is important to have an easy way to track your business expenses and income. When business finances are commingled with personal finances, it becomes nearly impossible to provide a clear financial trail.

When choosing a business bank account, there are several important factors to consider. Here are four things I tell my business owner clients to consider when choosing a business bank account.

1. Access to banking services and customer service

When it comes to running a business, a variety of banking services can help you effectively manage your business finances. Beyond just opening a business bank account, you want to ensure that the financial institution you choose can provide access to services such as a checking account, savings account, business loans , wire transfers, fraud prevention services, a notary, checkbooks, business credit cards , online and mobile banking, and bill payment services.

If you want more one-on-one attention from a banker, consider opening an account with your local bank or credit union. You may also prefer a physical branch if you plan to make daily deposits or withdrawals of cash or checks.

This may be more challenging to do with an online bank. Many online banks may offer deposits and withdrawals, but their ATM network may not be as large as a well-known brick-and-mortar bank. For this reason, some small business owners open an account at their local bank where they have their personal accounts and know the level of customer service they will receive.

Consider opening your business checking and savings accounts at different financial institutions so that you can have access to both better banking services at a physical branch and higher interest rates at an online bank.

2. Terms and fees (including minimum balance)

The fees associated with business bank accounts can vary widely depending on the financial institution. Some of the most common fees to be aware of include monthly maintenance fees, overdraft fees , wire transfer fees, minimum balance fees, and ATM fees.

You may find that online banks charge fewer fees than brick-and-mortar banks, but you must consider this in conjunction with the other features.

Seek an account with reasonable fees that can accommodate your business.

3. Ease of paying contractors

Some business bank accounts, especially online accounts, offer free invoicing and bookkeeping software/features.

If you use accounting software (such as QuickBooks) to manage your business finances, accessing a business bank account that offers integration features may be desirable. Trust me, this will make your or your accountant's life much easier.

In addition, some accounts allow integrations with payroll and tax preparation software. This will help to make the process of paying contractors with 1099s more seamless.

4. The bank's security offerings

One of the most important things you should consider when choosing a business bank account is security. There are certain features that you want to look for to make sure your account is protected.

First, you want to make sure that the bank you choose is FDIC-insured (or NCUA-insured if a credit union). In addition, you want to make sure that the institution has additional layers of security such as multi-factor authentication and fraud detection services, which include account monitoring and alerts for suspicious activity.

Ensure that whatever bank you choose offers the best security features to protect your business from fraud.

When choosing a bank account, consider all the various banking features offered by different financial institutions to find the one that best suits your business's financial needs. Also, remember that your decision is not permanent. It is easy to switch banks if necessary.

Watch: The 3 most important things you need to know about starting a business

do you need a business plan to open a business bank account

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Opening a business bank account: what you need.

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One of the biggest challenges of running a business is managing cash flow and keeping track of spending. A dedicated business bank account can make that easier to do and it can save you some trouble at tax time if you need to track deductible expenses.

What do you need to open a business bank account? And how do you decide where to open a bank account for your business?

Knowing what to expect can save some time when you're ready to get your account up and running.

Found

Found is banking built for the self-employed

Requirements to open a business bank account.

Banks and credit unions can set the guidelines for what you'll need to open a business bank account. If you've already chosen a bank, it should be able to tell you exactly what you'll need in terms of documentation.

Typically, banks expect you to provide certain details about yourself and the business. You'll also need to meet the minimum opening deposit requirement if there is one.

Here's a more detailed list of what is usually required for opening a business bank account:

Employer Identification Number (EIN)

The first thing you might need to open a business bank account is an Employer Identification Number (EIN) or Federal Tax Identification Number (FTIN). These numbers, issued by the IRS, are used to identify business entities for tax purposes.

You can apply for an EIN or FTIN online through the IRS website . It's free to apply and your EIN can be issued instantly.

Whether you need an EIN or not depends on your business type. Sole proprietors, for example, generally don't need them if they don't have employees. In that case, you could apply for a business bank account with your Social Security number instead.

Business identification

Banks usually need certain paperwork that shows your business exists legally. The list of documents that a bank may ask for can include:

  • Business-formation documents.
  • An ownership agreement.
  • A copy of your business license.

Should you operate under a “Doing Business As” name, you'll also need to share that with your bank.

If you haven't yet filled out the necessary paperwork to register your business, you may need to backtrack a little before you can open a business bank account. Your state's Secretary of State office or revenue agency should be able to offer guidance on how to register your business where you live.

Personal identification

You'll also need to prove to the bank that you are who you say you are to open a new business account. Banks usually expect you to have a government-issued ID, which can include:

  • A driver's license.
  • State ID card.

Again, if you're setting up a business bank account as a sole proprietor you'll also need to share your Social Security number.

Opening deposit

It's not uncommon for banks to require a minimum opening deposit for new business accounts. The amount you'll need to have can depend on the bank.

You could make your minimum deposit via ACH transfer if you're opening a business bank account online. If you're opening your account in person at a branch, you could deposit a check or cash instead.

How to open a business bank account

Opening a business bank account isn't that different from opening a personal bank account. The main distinction lies in the type of information you'll need to provide to the bank.

Here's how the process typically works:

  • Choose a business bank account to open.
  • Complete the application for a new business account.
  • Provide any supporting documentation the bank needs.
  • Link an external bank account and make your initial deposit.

Opening a business bank account online can save time since you don't have to visit a branch. You can easily transfer money from your current bank to fund your new account. You'll just need the bank account number and routing number for the financial institution that the money is coming from.

Best business bank accounts

There are plenty of business bank accounts to choose from, including ones offered by brick-and-mortar banks, online banks, and credit unions. You might also consider using a business banking app if you're looking for an alternative to traditional banking options.

Here are three of the best business bank accounts, based on the features offered and the fees you'll pay.

Lili is a fintech platform that provides business banking services through Choice Financial Group, a Federal Deposit Insurance Corporation (FDIC)-member bank. Lili users can get a business checking account, bookkeeping tools, and tax-planning tools all in one place. Some of the features that make Lili unique include:

  • No overdraft fees or hidden fees.
  • No deposit or minimum-balance requirements.
  • Invoicing software.
  • Smart bookkeeping and tax-report generation.
  • Tools and resources to help you grow your business.

You can add a business savings account to your checking account and Lili pays a competitive annual percentage yield (APY) on balances. There's also the option to upgrade to Lili Premium to receive priority customer support when you need it.

Revolut is another fintech platform that offers business banking services. It's designed for businesses that operate internationally. You can transfer money securely across borders and access funds in more than 25 currencies. Revolut also makes it easier to accept payments from different countries.

You might appreciate the team spending feature that's included with Revolut debit cards if you have one or more employees. This feature allows you to set spending permissions and limits while tracking expenses for each linked card in one place.

Revolut's basic plans for companies and freelancers are free. If you need more features or tools, you can upgrade to a paid plan.

If you prefer to keep accounts at a traditional bank, U.S. Bank has several small business checking options to choose from. There are accounts for:

  • New and smaller businesses.
  • Mid-sized businesses.
  • Larger businesses that maintain higher balances.

U.S. Bank also offers specialty accounts for nonprofits and for businesses that are looking for premium features and support. All of the bank's business accounts carry a monthly maintenance fee, but there are numerous ways to waive them.

You can manage your accounts online or through the U.S. Bank mobile app. You also have the convenience of visiting a U.S. Bank branch or ATM near you.

Factors to consider when opening a business bank account

It's important to take your time and compare business bank accounts to find the right one for your needs. Here are some of the questions you might consider when shopping around for business banking options.

  • What is the minimum opening deposit and are there ongoing minimum balance requirements?
  • Are there daily, weekly, or monthly limits on deposit and withdrawal transactions?
  • What are the fees associated with the account?
  • Does the bank offer multiple business bank accounts, including checking, savings, and money market options?
  • Is branch banking access necessary, based on the type of business you run?
  • Does the bank offer a robust mobile app and user-friendly online banking?
  • Is there dedicated business account support and if so, when is help available?

It's also a good idea to consider which features or benefits would be most useful to have, based on the type of business you run.

If you have employees, for example, you might prefer to keep your accounts at a bank that offers payroll services. Or you might lean toward a bank that specializes in addressing the unique needs of certain industries or business types.

TIME Stamp: Opening a business bank account doesn't have to be complicated

Starting a business can be exciting and a little stressful since there may be a lot to do before you officially start operating. Opening a business bank account is an important step so that you can begin receiving payments and paying expenses. While it might feel a little intimidating, it's not that difficult to do once you know what's required.

Frequently asked questions (FAQs)

What are the different types of business accounts.

Business accounts can include checking accounts, savings accounts, and money market accounts . Banks can also offer specialty accounts and services to businesses, such as merchant accounts and credit card accounts. The common thread is that these accounts are specifically designed to meet the needs of business owners.

Why can't I open a business bank account?

If you've tried to open a business bank account and been denied, it may be because you're lacking the necessary documentation or information that the bank requires. Banks may also deny you a business account if the bank views your venture as being too risky or doesn't work with the industry that you operate in.

Do you need a bank to start a business?

You don't need a separate bank account to start a business, but it's a good idea to have one for a few reasons. For one thing, a separate business bank account can make it easier to track expenses and simplify reporting at tax time. For another, a business bank account can provide some liability protection that a personal bank account does not.

A business bank account could also make it easier to get approved for small business loans or credit cards. Lenders may ask to see financial records like cash flow statements or profit and low statements, which are easier to generate when you're keeping track of expenses in a separate account.

The information presented here is created independently from the TIME editorial staff. To learn more, see our About page.

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Manage your money on the go with the 5 best online business bank accounts, we ranked online business bank accounts based on factors like fees, atm access and minimum deposit amounts..

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Online-only banks have grown in popularity in recent years thanks to certain benefits that brick-and-mortar banks can't match. With less overhead costs from not having to operate physical branches, online banks may offer lower fees and other perks like better interest rates. Of course, the convenience of being able to bank from anywhere, anytime, can also be a huge draw, especially for busy small business owners .

Below, CNBC Select rounded up the five best online business bank accounts. We considered various factors when ranking the top accounts, including fees, interest rates and more. (Read more about our methodology  below.)

Best online business checking accounts

  • Best for no fees: Bluevine Business Checking
  • Best for streamlined business support: LendingClub Tailored Checking
  • Best for special perks: Novo Business Checking
  • Best for debit card rewards: Grasshopper Business Checking
  • Best for sole proprietors and single-owner LLCs: EverBank Business Checking

Best for no fees

Bluevine business checking, special offer, monthly maintenance fee.

Minimum deposit to open

Minimum balance

Annual Percentage Yield (APY)

Standard: 2.0% APY on balances up to and including $250,000 if you meet a monthly activity goal* Premier: 4.25% APY without minimum qualifications

Free ATM network

No fees at over 38,000 ATM locations nationwide

ATM fee reimbursement

Small business perks.

Two free checkbooks

Overdraft fee

  • Mobile check deposit

Terms apply. Bluevine accounts are FDIC insured up to $3 million per depositor through Coastal Community Bank, Member FDIC

  • No monthly fees, monthly or daily balance minimums, ACH payment fees, incoming wire fees or overdraft fees
  • Ability to instantly lock and unlock your Bluevine Business Debit Mastercard® for added security
  • Connect to business tools like PayPal, Stripe and Expensify
  • Unlimited transactions
  • Online only (not great if you prefer in-person banking)
  • No ATM refunds for out-of-network transactions

*The requirements to earn interest are either:

  • Debit Card Spend: Spend $500 per month with Bluevine Business Debit Mastercard® issued by Coastal Community Bank pursuant to a license from Mastercard inc, which can be used everywhere Mastercard® is accepted.
  • Incoming Payments: Receive $2,500 per month in customer payments into Bluevine Business Checking account via ACH, wire transfer, mobile check deposit, or directly from merchant payment processing provider

Bluevine Business Checking stands out for offering a competitive interest rate for a checking account. It also doesn't charge any monthly, minimum balance or insufficient fund fees and doesn't limit the number of transactions you can make in a month.

[ Jump to more details ]

Best for streamlined business support

Lendingclub tailored checking.

1.00% cash back on qualifying purchases made using the debit card tied to a Tailored Checking account with an average monthly balance of $500

$10 (waived if the average monthly balance is at least $500.00)

1.50% APY on balances between $0.00–$499.99; 1.50% APY on balances between $500.00-$99,999.99; 0.10% APY on balances of $100,000.00 or more

Doesn't charge a fee to use another bank's ATM

ATM fee rebate available

Can sync your checking account to Quickbooks® or Quicken®; ability to create and send online invoices and get paid using Autobooks

Not disclosed

Terms apply.

  • Small minimum deposit to open the account
  • ATM rebates offered
  • Offers an APY
  • Offers a debit card that can be used to earn cash back
  • Integrations with business tools like Quickbooks® or Quicken®
  • Monthly maintenance fee if you don't keep an average balance of at least $500 in the account
  • Earn a lower APY if you have a higher account balance
  • Stop payment fee of $25

LendingClub Tailored Checking is a well-rounded business checking account that earns interest on your balance and cash back on your debit card purchases. Plus, customers can easily integrate their accounts with Quicken® or Quickbooks® for a more streamlined accounting process. The account also has a built-in invoicing and payment platform called Autobooks, which you can use to create and send invoices and accept payments from customers.

Best for special perks

Novo business checking, special offers.

Perks upon sign up can include $3,000 in Google Cloud credits, $150 toward Google Ads, 40% off the first six months of QuickBooks Online and up to $20,000 in fee-free credit card transactions when you link your account with Stripe

No out-of-network ATM fees and reimburses fees charged by other ATM operators, up to $7 per month

Yes, up to $7 per month worldwide

Sync your account with Slack, Stripe, Shopify, Quickbooks, TransferWise, Xero, Zapier and other popular merchant tools. Amazon integration for sales and revenue tracking.

If a transaction is made and there are insufficient funds to complete the payment, your Novo account will not be charged an overdraft fee

Terms apply. Novo Platform Inc. {"Novo") is a fintech, not a bank. Banking services provided by Middlesex Federal Savings, F.A. Member FDIC.

  • Seamless tech integrations make it easy for the solo entrepreneur who does it all
  • Money-saving partnerships with popular invoicing, marketing and communications tools
  • Syncs easily to Google Pay and Apple Pay
  • Unlimited fee-free monthly transactions
  • No monthly fees or minimum balance requirements
  • ATM reimbursements up to $7 per month
  • No easy way to deposit cash

Novo Business Checking offers various discounts useful to business owners. When you sign up for the account, you can get up to $3,000 in Google Cloud credits, $150 toward Google Ads, 40% off the first six months of QuickBooks Online and up to $20,000 in fee-free credit card transactions when you link your account with Stripe. Plus, it has no transaction limits and reimburses third-party ATM fees up to $7 per month.

Best for debit card rewards

Grasshopper business checking.

1.00% cash back on qualifying purchases

1.51% APY on balances of $0.01—$24,999.99 and $250,000.01; up to 2.25% APY on balances of $25,000-$250,000

No fee withdrawals at over 37,000 MoneyPass ATMs nationwide

Rewards debit card access

  • No monthly fees, balance minimums or overdraft fees
  • Small minimum deposit amount to open the account
  • You need a higher account balance to earn the highest APY tier

The Grasshopper Business Checking account stands out for having no monthly fees, balance minimums or overdraft fees and offering a debit card that earns rewards . Account holders can earn 1% cash back on qualifying purchases which can be redeemed as statement credit.

Best for sole proprietors and single-owner LLCs

Everbank business checking.

$14.95 (waived if the average daily balance is at least $5,000)

Fee-free at over 10,000 ATMs

Will automatically reimburse customers up to $15 for fees paid at out-of-network ATMs

Treasury services let you get personalized cash flow strategies from a team of experts

  • Automatically reimburses ATM fees
  • Offers a team of experts who can assist with personalized cash flow strategies
  • No overdraft fee
  • First 200 items processed for free each month
  • Offers overdraft protection
  • High minimum deposit to open the account
  • Monthly maintenance fee if you don't keep an average daily balance of at least $5,000 in the account
  • Doesn't pay an APY

EverBank Small Business Checking is geared toward sole proprietors and single-owner LLCs. All account holders will enjoy the same APY and enjoy no monthly maintenance fee regardless of their balance. By comparison, EverBank's checking account options for other types of businesses and non-profits require a $5,000 minimum monthly balance to waive the monthly fee.

More on our top online business checking accounts

Bluevine is a fintech company with banking services provided by Coastal Community Bank. It offers some features you often don't get through online banks, such as the ability to deposit cash, order checkbooks and more.

Standard Bluevine business checking customers can earn a 2.00% APY on balances up to $250,000 by meeting monthly activity goals, while Premier customers can unlock an even higher APY.

Account holders can deposit checks from their phones and create dedicated employee login information so they can share access with the rest of their team. Other perks include various accounts payable integrations that can help streamline your business operations and up to $3 million in FDIC insurance.

2.00% APY to 4.25%, depending on your account tier

[ Return to account summary ]

The LendingClub Tailored Checking account offers a competitive APY on your balance and earns 1% cash back on qualifying debit card purchases if you have a balance of at least $500. Another big perk is that LendingClub offers unlimited transactions and unlimited third-party ATM fee reimbursements worldwide.

The account requires a low $100 minimum deposit, but there is no minimum balance requirement after that. There is a $10 monthly maintenance fee, but you can get it waived by maintaining a monthly balance of $500 or more.

0.10% to 1.50% APY, depending on your balance

Novo Business Checking is a no-frills account that doesn't charge a monthly maintenance fee and doesn't require a minimum deposit to open the account. It also offers unlimited fee-free transactions with no overdraft fee .

The account allows for easy integration with business tools like Stripe, Shopify, QuickBooks and Zero, which makes it easier for business owners to streamline business operations. It also allows businesses to create and send unlimited invoices through its free built-in invoicing software.

Novo doesn't allow for cash deposits, but you can use the mobile app to deposit money orders and checks.

The Grasshopper Business Checking account requires a modest $100 deposit to open the account, but has no minimum balance requirement after that. This account also doesn't charge any monthly maintenance fees or overdraft fees.

Account holders can also earn interest for their balance through a tiered APY offering. You can earn 1.51% APY on balances of up to $24,999.99 and more than $250,000. Then, you'll earn up to 2.25% APY on balances of $25,000 to $250,000.

1.51% to 2.25% APY, depending on your balance

EverBank offers several business checking accounts, including ones tailored to small businesses and non-profits . Its small business checking account earns a 0.50% APY on all balances and has no monthly management fees to worry about, but has a relatively high minimum deposit requirement of $1,500.

Customers can make fee-free withdrawals at over 100,000 Allpoint and MoneyPass ATMs in the U.S. All customers also get up to $15 in third-party ATM fees reimbursed each month, while accounts with a balance of at least $5,000 receive unlimited ATM fee reimbursement.

Other features include mobile check deposit and overdraft protection by linking a business money market account.

Can you open a business bank account online?

Banks typically offer three ways to open a business bank account: You can usually do it online, in person by visiting a branch, or over the phone. However, remember that some banks may offer any combination of those options. For instance, an online-only bank may only allow new customers to open an account online or over the phone.

Can I open a business bank account online with only an Employer Identification Number (EIN)?

Your EIN is one of a few pieces of information you'll need to open a bank account. You may also need to provide your business registration and business address. Some banks may also require some additional pieces of information, such as your business website. Be sure to double-check the requirements of your desired bank before beginning the process.

Are online business bank accounts safe?

As long as your online business bank is FDIC-insured (the standard is up to $250,000 for deposit accounts), it is generally as safe as a brick-and-mortar bank. It can also help to look at customer reviews to get a feel for any pros and cons and general customer experience.

Can I open a business bank account immediately?

Most business bank accounts should have you up and running in a matter of minutes. One of the best ways to ensure a speedy process is to come prepared with all the required documentation and double-check your information for inaccuracies before submitting your application.

Bottom line

If you're in the market for an online business checking account, you have many options. The top online business bank accounts stand out for offering features like low or no minimum deposits to open, interest on your money and rewards for debit card purchases.

Money matters — so make the most of it. Get expert tips, strategies, news and everything else you need to maximize your money, right to your inbox.  Sign up here .

Why trust CNBC Select?

At  CNBC Select , our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every business checking account review is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of business banking products .  While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics. See  our methodology  for more information on how we choose the best online business bank accounts.

Our methodology

To determine which online business checking accounts are best,  CNBC Select  analyzed dozens of  U.S. business checking accounts . We narrowed down our rankings by considering no-fee checking accounts or accounts with easy ways to waive the monthly maintenance fees.

We compared each checking account on a range of features, including:

  • Minimum balance requirement
  • Mobile banking ease
  • Small business tools and support
  • Large ATM network
  • Account accessibility
  • Customer reviews, when available

All of the accounts included on this list are either members of the  Federal Deposit Insurance Corporation (FDIC)  or FDIC-insured through partner institutions. This insurance protects and reimburses you up to your balance and the legal limit in the event your bank or credit union fails.

The rates and fee structures for checking accounts are subject to change without notice and they often fluctuate in accordance with the  prime rate .

Your earnings depend on any associated fees and the balance you have in your checking account. To open an account, some banks and institutions may require a deposit of new money, meaning you can't transfer money you already had in an account at that bank.

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Bank Business Plan Template

Written by Dave Lavinsky

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Bank Business Plan

Over the past 20+ years, we have helped over 500 entrepreneurs and business owners create business plans to start and grow their banks.

If you’re unfamiliar with creating a bank business plan, you may think creating one will be a time-consuming and frustrating process. For most entrepreneurs it is, but for you, it won’t be since we’re here to help. We have the experience, resources, and knowledge to help you create a great business plan.

In this article, you will learn some background information on why business planning is important. Then, you will learn how to write a bank business plan step-by-step so you can create your plan today.

Download our Ultimate Business Plan Template here >

What Is a Business Plan?

A business plan provides a snapshot of your bank as it stands today, and lays out your growth plan for the next five years. It explains your business goals and your strategies for reaching them. It also includes market research to support your plans.

Why You Need a Business Plan

If you’re looking to start a bank or grow your existing bank, you need a business plan. A business plan will help you raise funding, if needed, and plan out the growth of your bank to improve your chances of success. Your bank business plan is a living document that should be updated annually as your company grows and changes.

Sources of Funding for Banks

With regards to funding, the main sources of funding for a bank are personal savings, credit cards, bank loans, and angel investors. When it comes to bank loans, banks will want to review your business plan and gain confidence that you will be able to repay your loan and interest. To acquire this confidence, the loan officer will not only want to ensure that your financials are reasonable, but they will also want to see a professional plan. Such a plan will give them the confidence that you can successfully and professionally operate a business. Personal savings and bank loans are the most common funding paths for banks.  

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How to write a business plan for a bank.

If you want to start a bank or expand your current one, you need a business plan. The guide below details the necessary information for how to write each essential component of your bank business plan.

Executive Summary

Your executive summary provides an introduction to your business plan, but it is normally the last section you write because it provides a summary of each key section of your plan.

The goal of your executive summary is to quickly engage the reader. Explain to them the kind of bank you are running and the status. For example, are you a startup, do you have a bank that you would like to grow, or are you operating a chain of banks?

Next, provide an overview of each of the subsequent sections of your plan.

  • Give a brief overview of the bank industry.
  • Discuss the type of bank you are operating.
  • Detail your direct competitors. Give an overview of your target customers.
  • Provide a snapshot of your marketing strategy. Identify the key members of your team.
  • Offer an overview of your financial plan.

Company Overview

In your company overview, you will detail the type of bank you are operating.

For example, you might specialize in one of the following types of banks:

  • Commercial bank : this type of bank tends to concentrate on supporting businesses. Both large corporations and small businesses can turn to commercial banks if they need to open a checking or savings account, borrow money, obtain access to credit or transfer funds to companies in foreign markets.
  • Credit union: this type of bank operates much like a traditional bank (issues loans, provides checking and savings accounts, etc.) but banks are for-profit whereas credit unions are not. Credit unions fall under the direction of their own members. They tend to serve people affiliated with a particular group, such as people living in the same area, low-income members of a community or armed service members. They also tend to charge lower fees and offer lower loan rates.
  • Retail bank: retail banks can be traditional, brick-and-mortar brands that customers can access in-person, online, or through their mobile phones. They also offer general public financial products and services such as bank accounts, loans, credit cards, and insurance.
  • Investment bank: this type of bank manages the trading of stocks, bonds, and other securities between companies and investors. They also advise individuals and corporations who need financial guidance, reorganize companies through mergers and acquisitions, manage investment portfolios or raise money for certain businesses and the federal government.

In addition to explaining the type of bank you will operate, the company overview needs to provide background on the business.

Include answers to questions such as:

  • When and why did you start the business?
  • What milestones have you achieved to date? Milestones could include the number of clients served, the number of clients with positive reviews, reaching X number of clients served, etc.
  • Your legal business Are you incorporated as an S-Corp? An LLC? A sole proprietorship? Explain your legal structure here.

Industry Analysis

In your industry or market analysis, you need to provide an overview of the bank industry.

While this may seem unnecessary, it serves multiple purposes.

First, researching the bank industry educates you. It helps you understand the market in which you are operating.

Secondly, market research can improve your marketing strategy, particularly if your analysis identifies market trends.

The third reason is to prove to readers that you are an expert in your industry. By conducting the research and presenting it in your plan, you achieve just that.

The following questions should be answered in the industry analysis section of your bank business plan:

  • How big is the bank industry (in dollars)?
  • Is the market declining or increasing?
  • Who are the key competitors in the market?
  • Who are the key suppliers in the market?
  • What trends are affecting the industry?
  • What is the industry’s growth forecast over the next 5 – 10 years?
  • What is the relevant market size? That is, how big is the potential target market for your bank? You can extrapolate such a figure by assessing the size of the market in the entire country and then applying that figure to your local population.

Customer Analysis

The customer analysis section of your bank business plan must detail the customers you serve and/or expect to serve.

The following are examples of customer segments: individuals, small businesses, families, and corporations.

As you can imagine, the customer segment(s) you choose will have a great impact on the type of bank you operate. Clearly, corporations would respond to different marketing promotions than individuals, for example.

Try to break out your target customers in terms of their demographic and psychographic profiles. With regards to demographics, including a discussion of the ages, genders, locations, and income levels of the potential customers you seek to serve.

Psychographic profiles explain the wants and needs of your target customers. The more you can recognize and define these needs, the better you will do in attracting and retaining your customers.

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Competitive Analysis

Your competitive analysis should identify the indirect and direct competitors your business faces and then focus on the latter.

Direct competitors are other banks.

Indirect competitors are other options that customers have to purchase from that aren’t directly competing with your product or service. This includes trust accounts, investment companies, or the stock market. You need to mention such competition as well.

For each such competitor, provide an overview of their business and document their strengths and weaknesses. Unless you once worked at your competitors’ businesses, it will be impossible to know everything about them. But you should be able to find out key things about them such as

  • What types of customers do they serve?
  • What type of bank are they?
  • What is their pricing (premium, low, etc.)?
  • What are they good at?
  • What are their weaknesses?

With regards to the last two questions, think about your answers from the customers’ perspective. And don’t be afraid to ask your competitors’ customers what they like most and least about them.

The final part of your competitive analysis section is to document your areas of competitive advantage. For example:

  • Will you provide loans and retirement savings accounts?
  • Will you offer products or services that your competition doesn’t?
  • Will you provide better customer service?
  • Will you offer better pricing?

Think about ways you will outperform your competition and document them in this section of your plan.  

Marketing Plan

Traditionally, a marketing plan includes the four P’s: Product, Price, Place, and Promotion. For a bank business plan, your marketing strategy should include the following:

Product : In the product section, you should reiterate the type of bank company that you documented in your company overview. Then, detail the specific products or services you will be offering. For example, will you provide savings accounts, auto loans, mortgage loans, or financial advice?

Price : Document the prices you will offer and how they compare to your competitors. Essentially in the product and price sub-sections of your plan, you are presenting the products and/or services you offer and their prices.

Place : Place refers to the site of your bank. Document where your company is situated and mention how the site will impact your success. For example, is your bank located in a busy retail district, a business district, a standalone office, or purely online? Discuss how your site might be the ideal location for your customers.

Promotions : The final part of your bank marketing plan is where you will document how you will drive potential customers to your location(s). The following are some promotional methods you might consider:

  • Advertise in local papers, radio stations and/or magazines
  • Reach out to websites
  • Distribute flyers
  • Engage in email marketing
  • Advertise on social media platforms
  • Improve the SEO (search engine optimization) on your website for targeted keywords

Operations Plan

While the earlier sections of your business plan explained your goals, your operations plan describes how you will meet them. Your operations plan should have two distinct sections as follows.

Everyday short-term processes include all of the tasks involved in running your bank, including reconciling accounts, customer service, accounting, etc.

Long-term goals are the milestones you hope to achieve. These could include the dates when you expect to sign up your Xth customer, or when you hope to reach $X in revenue. It could also be when you expect to expand your bank to a new city.  

Management Team

To demonstrate your bank’s potential to succeed, a strong management team is essential. Highlight your key players’ backgrounds, emphasizing those skills and experiences that prove their ability to grow a company.

Ideally, you and/or your team members have direct experience in managing banks. If so, highlight this experience and expertise. But also highlight any experience that you think will help your business succeed.

If your team is lacking, consider assembling an advisory board. An advisory board would include 2 to 8 individuals who would act as mentors to your business. They would help answer questions and provide strategic guidance. If needed, look for advisory board members with experience in managing a bank or successfully running a small financial advisory firm.  

Financial Plan

Your financial plan should include your 5-year financial statement broken out both monthly or quarterly for the first year and then annually. Your financial statements include your income statement, balance sheet, and cash flow statements.

Income Statement

An income statement is more commonly called a Profit and Loss statement or P&L. It shows your revenue and then subtracts your costs to show whether you turned a profit or not.

In developing your income statement, you need to devise assumptions. For example, will you see 5 clients per day, and/or offer sign up bonuses? And will sales grow by 2% or 10% per year? As you can imagine, your choice of assumptions will greatly impact the financial forecasts for your business. As much as possible, conduct research to try to root your assumptions in reality.

Balance Sheets

Balance sheets show your assets and liabilities. While balance sheets can include much information, try to simplify them to the key items you need to know about. For instance, if you spend $50,000 on building out your bank, this will not give you immediate profits. Rather it is an asset that will hopefully help you generate profits for years to come. Likewise, if a lender writes you a check for $50,000, you don’t need to pay it back immediately. Rather, that is a liability you will pay back over time.

Cash Flow Statement

Your cash flow statement will help determine how much money you need to start or grow your business, and ensure you never run out of money. What most entrepreneurs and business owners don’t realize is that you can turn a profit but run out of money and go bankrupt.

When creating your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting or growing a bank:

  • Cost of furniture and office supplies
  • Payroll or salaries paid to staff
  • Business insurance
  • Other start-up expenses (if you’re a new business) like legal expenses, permits, computer software, and equipment

Attach your full financial projections in the appendix of your plan along with any supporting documents that make your plan more compelling. For example, you might include your bank location lease or a list of accounts and loans you plan to offer.  

Writing a business plan for your bank is a worthwhile endeavor. If you follow the template above, by the time you are done, you will truly be an expert. You will understand the bank industry, your competition, and your customers. You will develop a marketing strategy and will understand what it takes to launch and grow a successful bank.  

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How Do You Start a Bank Business?

Starting a bank business is easy with these 14 steps:

  • Choose the Name for Your Bank Business
  • Create Your Bank Business Plan
  • Choose the Legal Structure for Your Bank Business
  • Secure Startup Funding for Your Bank Business (If Needed)
  • Secure a Location for Your Business
  • Register Your Bank Business with the IRS
  • Open a Business Bank Account
  • Get a Business Credit Card
  • Get the Required Business Licenses and Permits
  • Get Business Insurance for Your Bank Business
  • Buy or Lease the Right Bank Business Equipment
  • Develop Your Bank Business Marketing Materials
  • Purchase and Setup the Software Needed to Run Your Bank Business
  • Open for Business

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29 Best Banks for Small Business Owners in 2024

By Meaghan O'Neill , Kelsey Mulvey , and Lila Allen

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All products featured on Architectural Digest are independently selected by our editors. However, when you buy something through our retail links, we may earn an affiliate commission.

Running a business comes with plenty of fiscal responsibilities. Fortunately, opening an account with one of the best banks for small business can help with everything from administering payroll to budgeting for office supplies—even if numbers aren’t your forte. For an entrepreneur, opening a bank account for business might seem like a hassle, but separating personal and professional finances is a move that will pay off. Setting up a small business bank account makes it easy to spot paid bills, expenses, and payments received; plus, you can establish business line of credit , which is important if you want to apply for a business credit card or a small business loan . (A 2018 Nav survey found that 70% of small business owners without a professional checking account were denied by lenders.)

While many small business bank accounts have similarities, they can have nuances that may be better suited for your company’s needs. Ultimately, you’ll want to consider your company’s average account balance and number of transactions as well as logistical factors, like location, customer service, and mobile banking. While finding the right bank account for business can be challenging, AD PRO has assembled the tips below to help, as well as a list of the ultimate small business bank accounts.

Understanding small business bank account basics

Unless you have a background in banking services, researching small business bank accounts may feel overwhelming—but understanding the basics will help you make the best decisions for your company. Before you start your search for the best small business banking programs, consider a few of these FAQs.

What is a business checking account?

Think of a business checking account as the primary destination for all your company’s finances. When you open a business checking account, you can use it to pay invoices, bills, and employees, withdraw cash, and even receive payments from credit cards. So, how is that different from the checking account you already have? The main difference between a business checking account and a personal one is its intended purpose. Though you might be able to move funds into or out of it, a personal account isn’t set up with work in mind, and may have certain limitations. Meanwhile, a small business bank account is designed to support you as your business grows, which means you may be able to issue debit cards for employees or link finances up with your favorite bookkeeping software.

Since a business checking account is essential for most small businesses, you’ll want to open one immediately. But if you have even a small cash reserve, there’s value in opening a savings account too. Doing so can boost your line of credit, earn interest, and help you maintain minimum balance requirements.

How do you open a business bank account?

Once you find a bank that suits your small business needs, you’ll want to apply for an account promptly. Be ready to provide personal information like your social security number, mailing address, and a copy of your passport or driver’s license. Banks will also require you to submit your business’s name, address, an employer identification number (EIN), and any documentation to support the fact that your company is legitimate and you are the owner.

Some institutions may require deposits to open business bank accounts, but often that fee can be $100 or less. (If you opt for an option with no minimum opening balance, make sure to read the fine print to ensure you’re not compensating in monthly maintenance fees.) Some banks offer a sign-up bonus as a perk for opening an account; however, it’s important to prioritize whichever business checking account will be a good fit in the long run.

In most cases, you can quickly sign up for a business checking account online; however, approval may take a few business days.

How to choose a business bank account

No two companies are alike, which means your best small business banking match might be different from the rest of your network. But, if this is your very first time setting up a small business account, you may not even know what to look for in the first place.

Selecting the right small business bank account is a decision that should not be taken lightly. While some small business owners might want investing advice or great customer service, others might prioritize local knowledge or online convenience. To help, here are a few factors to consider.

Contrary to popular belief, a “free” business account isn’t always free. Although business banking accounts typically have higher fees than personal ones, some banks offer checking accounts with no monthly fees. However, account holders may need to maintain a minimum daily or monthly balance, or limit transactions to avoid fees. That said, free and low-cost accounts do exist. Read the fine print and choose wisely.

Unlike personal checking accounts, business bank accounts usually have limitations on monthly transactions (which include deposits, withdrawals, transfers, and electronic payments). Ranges vary, so it’s helpful to know where your small business falls on the spectrum, as well as the fees for exceeding the limit. There may also be a maximum to how many transactions you can make while still qualifying for a free account. Before applying, consider how your business operates on a monthly basis.

Many banks offer better rates to those small businesses that keep their balances above a certain amount, for either a daily or monthly average. Consider what yours will be and plan accordingly.

Today, you can have a small business account without ever stepping foot in a branch. For entrepreneurs who track their finances through websites or mobile apps—or complete most transactions online—going digital might be the right move. But if you deal with lots of cash, prefer human interaction, or want to build a rapport with a professional who understands your region or local economy, you’ll want to use a bank account with a physical branch nearby.

If you use QuickBooks, payroll software, or another accounting tool, you may want to work with a bank that allows you to integrate the data from your software. It’ll be a lot more efficient to balance your books if withdrawals automatically show up in QuickBooks. If you use PayPal or Square, you may find it helpful to have those transactions show up in your checking account too.

Small or large? As the business owner, the choice is yours. Having a close relationship with someone who works at a local bank (or a local branch of a national bank) can have its benefits. That person may have the ability to adjust fees or give you more wiggle room on a small business loan application. The downside of smaller banks is that information isn’t always clearly spelled out online, you may have to open an account in person, and the online banking tools may be lacking. By contrast, larger banks are likelier to outline fine print online and allow you to open an account digitally.

If you like the bank you use for personal finances, and it has a business checking account option that matches your needs, there’s nothing wrong with opening an account there. Being able to access information from multiple accounts through one location, website, or mobile app is a nice bonus.

With so many options, it’s easy to select a bank account for business that caters to your needs. But first, consider where your business will be a few years down the road. If you’re looking to scale up, you might want to consider a program with more monthly transactions than you currently need. Or, if you want to add an e-commerce element to your business plan, you might want to explore accounts with merchant services.

Should you join a credit union?

A business bank account is one way to manage your professional finances, but it’s not the only option. Some small business owners might find themselves drawn to a credit union, which is typically a cooperative, member-owned organization. The main difference between the two is that a bank is a for-profit financial institution, and a credit union is generally a nonprofit service. Additionally, small business owners will have to become a member of a credit union to use their services, while a bank only requires an account.

Although many credit unions might offer similar services—such as administering loans as well as setting up checking and saving accounts—they might have fewer features than a typical bank.

The best banks for small businesses

There are more than 4,100 commercial banks in the US offering thousands of business checking account options. What busy entrepreneur has time to sort through it all? Instead, read the list below for the best banks for small businesses.

This business bank account allows up to 100 transactions per fee period at no charge and cash deposits up to $5,000 per month. Although this account has a $10 monthly service fee, it can be avoided with a $500 daily balance. With a minimum opening deposit of just $25, this solution is excellent for a small business with limited cash-flow activity. The Initiate Business Checking account might be the simplest of Wells Fargo’s offerings, but it still offers a zero-liability debit card protection as well as fraud monitoring. And, as with all Wells Fargo business checking accounts, small business owners can apply online or in person, then send deposits and required documents later.

Sole proprietors with a lot of clients will find a lot to love about the Bluevine Business Checking account. Unlike larger banks, Bluevine has unlimited transactions as well as no monthly service fees or minimum balances with its standard plan. What’s more, account holders can access over 128,500 ATMs and retailers to deposit or withdraw cash. You’ll have some peace of mind knowing Bluevine does not charge overdraft fees. Small business owners can also earn up to 4.25% APY on balances up to $3 million, with $3 million in FDIC protection. And, to make your banking even easier, sync up your Bluevine business checking account with payment platforms like Venmo and Square, or accounting tools like QuickBooks Online.

At Comerica, a small $50 deposit can grant you a no-interest account without a monthly maintenance fee or minimum balance requirement. You can also waive your activity fees with deposits up to $2,500 per month, or 75 or fewer transactions. Comerica can sync with QuickBooks, making it possible to send digital payments or keep tabs on your accounting. Plus, as your business grows, you can upgrade to another account using the same account number. Comerica is not a nation-wide chain, but it does have locations in several states (though fees and conditions will vary).

If your business bank account needs are fairly simple, and you require few monthly transactions, Truist Simple Business Checking account could be a good option. With no monthly maintenance fee or minimum balance requirement, this small business bank account can be a great option for entrepreneurs who are just starting out. The account includes 50 transactions and $2,000 in cash processing per month. Stipulations and rules are laid out in further detail on its website.

With no monthly account maintenance fee for the first three months and a digital cash flow platform that helps you operate your business finances, this competitive account may be a good fit if you need checking but not a lot of transactions (150 or fewer per month). Once the $12 monthly fee kicks in, avoid it by maintaining a $500 average monthly collected balance.

With 250 transactions and $20,000 in cash deposits per pay period, Wells Fargo’s Navigate Business Checking account can be a great option for entrepreneurs whose businesses are growing quickly. Avoid the $25 monthly service fee by keeping a $10,000 minimum daily balance or $15,000 in combined balances across Wells Fargo accounts. (You can also make qualifying transactions from a linked payroll services account.) Small business owners with a Navigate Business Checking account pay no fees for incoming wire transfers, overdraft protection transfers, stop payments, cashier’s checks, or money orders. Plus, receive two complimentary outgoing domestic wire transfers and two non-Wells Fargo ATM cash withdrawals per fee period. Applying requires a minimum opening deposit of $25.

For a monthly maintenance fee-free checking account with no minimum balance, consider a First Citizens’ basic business bank account. The bank offers free transactions for up to 100 items and $5,000 each month. First Citizens has a robust digital banking program, but if you want to handle your finances in person, visit 500-plus branches in states such as California, North Carolina, Virginia, and more. At a minimum deposit of $100, this bank account for business is a little pricier upfront than some other affordable options, but there’s definitely a payoff with its perks.

This Bank of America account is great for the growing small business. Avoid the $16 monthly fee by spending $250 on net-qualified debit card purchases, maintaining a combined monthly average balance of $5,000, or becoming a Preferred Rewards Business member. Not only is Bank of America’s small business account equipped with small fraud protection and security—giving you some extra peace of mind—but it’s also linked to Zelle so you can easily send and receive money. Bank of America also has a handful of tools like Cash Flow Monitor and mobile check deposit so you can stay dialed into your day-to-day finances. You can apply online, but note that Bank of America outlets don’t exist everywhere.

This straightforward business checking account offers unlimited debit card purchases and transactions within the Chase ATM network, plus up to $5,000 in free cash deposits per statement cycle. The $15-per-month fee is waived when you maintain a $2,000 minimum daily balance or link a Chase private checking account. Apply online, or visit one of Chase’s many US locations to get started. Plus, earn $300 when you open a Business Complete Checking account with qualifying activities.

Conduct up to 300 transactions per month and deposit up to $5,000 in cash with Comerica’s Small Business Checking account, which waives monthly fees with monthly balances of $7,500 or more. Fees and conditions vary by location, so ask a Comerica representative before you apply. Like the company’s Basic Business Checking account, you’ll receive a year of bill-pay service free. This platform also offers specialized services such as an automated bill payment schedule and payroll activities.

This basic business checking account is ideal for businesses that make fewer than 250 transactions and less than $5,000 or $10,000 (depending on the state) in deposits. Maintain the minimum monthly balance of $5,000 to avoid the monthly fee of $15. One caveat: You must apply at a physical branch, but, once you have your small business account, you can receive text and email notifications and stay up-to-date with the brand’s mobile app.

With Business Advantage, you’ll pay no fees for stop payments, incoming wire transfers, or electronic deposits. You’ll also receive up to 500 transactions per month. Though fees are comparatively steep at $29.95 per cycle, you can avoid them in a number of flexible ways, such as spending with a business credit card or maintaining a monthly balance of $15,000. Bank of America also offers merchant and payroll services.

U.S. Bank’s Gold Business Checking Package can manage cash flow with 300 free transactions and $10,000 cash deposits (or 100 free cash transactions) per statement cycle. Small business owners can also get a 50% discount on their first check order up to $100. U.S. Bank offers overdraft protection and an EZ-Switch Kit to help you conveniently transfer a new business account. And, thanks to U.S. Bank’s SinglePoint Essentials, you can keep tabs on check, wire, and ACH accounts in one place.

Best for larger organizations with high transaction volume and complex cash management needs. After opening with a deposit of $25 or more, you’ll have up to 250 free transactions per statement period, with no fees for stop payments, cashier’s checks, wire transfers, or money orders. This offering is supported by Wells Fargo’s Commercial Electronic Office, which offers treasury insights, customized reports, ACH origination, and other online banking services.

If your small business has up to 500 basic transactions monthly and averages a monthly balance of at least $10,000, this business bank account may be for you. You’ll skip the account’s $30 monthly fee if you meet the minimum balance, and you can deposit up to $20,000 each month. And, thanks to CitiBusiness’s Safety Check, your small business checking account will cover overdrafts by transferring funds for your linked savings account or credit line.

With this PNC business bank account, there’s no charge for up to 500 combined transactions per month. Though the $22 monthly maintenance fee is waived for the first three statement cycles, this small business bank account offers more opportunities to offset that regular charge than the company’s Business Checking option. There’s also cash-flow insight and analysis and a business debit card no charge. Earn cash back on everyday expenses with PNC’s Purchase Payback program, and the bank’s Quick Switch Kit makes it easy to change banks.

If your business is expanding quickly, this Citizens account—which offers 500 free check transactions per statement period—may give you a nice boost. Waive the monthly $25 fee by maintaining a $10,000 average daily balance or $35,000 monthly combined balance. Apply for an account in person at one of the bank’s 1,000-plus branch locations.

The Enhanced option of Capital One’s small business banking platform has online banking options like bill pay and mobile banking, as well as perks like unlimited free domestic wires and no-fee digital transactions. Account holders can also send out up to five domestic wires each month for no charge. The $35 monthly fee can be waived with a $25,000 minimum 30- or 90-day average balance. And like other Capital One banking offerings, accounts are FDIC-insured.

A standout among online-only business bank accounts, Novo offers free business checking with no hidden fees. (It will even refund up to $7 in ATM fees each month.) Novo also no longer requires a minimum balance to open an account. ACH transfers are a breeze, but if you need to issue a physical check, they’ve also got you covered. Digital entrepreneurs will appreciate Novo’s easy-to-understand analysis and human-powered customer service department, and, as a digital native, this bank also takes integration seriously, interfacing with Shopify, Stripe, Amazon, and Xero.

If you are a small business owner without a lot of cash to spare, Varo’s proactive platform might be for you. The online bank prides itself on having no hidden costs, as well as waiving monthly maintenance fees, required minimum balance, foreign transaction fees, and ATM fees within the Allpoint network. Depending on the timing, Varo claims that its direct deposit feature can help you get paid up to two days earlier than other banks. And if you want to focus on growing your business’s wealth, opt into Varo’s Save Your Change and Save Your Pay programs.

Designed for small businesses with moderate account activity, Axos Bank charges no monthly maintenance fees and offers unlimited domestic ATM fee reimbursements. You’ll get your first set of 50 checks free, QuickBooks compatibility, up to 60 items per month through Axos’s Remote Deposit Anywhere program. Not only does this small business bank account require no initial deposit or minimum balance requirements, new business owners are currently also eligible for a $400 welcome bonus.

Created exclusively for sole proprietors and single-owner LLCs, EverBank’s Small Business Checking Account offers no monthly maintenance fees and competitive APYs on balances. Opening a business checking account through EverBank (formerly TIAA Bank) isn’t cheap—it requires a $1,500 deposit—but you will be reimbursed for up to $15 in ATM fees, and you’ll receive overdraft protection. Other services include domestic and foreign wire transfers, comprehensive bill pay solutions, ACH transfers, and thorough financial reporting and analysis.

If you’re a growing business with some cash reserves, this Axos business bank account offers competitive interest rates and no monthly maintenance fee with an average daily balance of $5,000 (it’s $10 monthly). Like the bank’s Basic Business Checking account, you’ll receive unlimited domestic ATM fee reimbursements and your first 50 checks free. With the account you’ll also get up to 60 remote deposits per month.

Among regional options, Citizens Bank Clearly Better Business Checking offering is one of the best small business bank accounts in its field, with no maintenance fees and no minimum monthly balance. This small business account includes coverage of 200 check transactions per statement period. Apply in person at one of the bank’s 1,000-plus branches throughout New England, the Mid-Atlantic, and Midwest.

TD is a great option for the small business owner who wants a local bank and has moderate to high monthly transaction volume (meaning up to 500 of them) and cash deposits up to $5,000. Though monthly maintenance fees are $25, they can be waived by meeting a $1,500 minimum balance and a personal checking account can be bundled to meet the requirement. It’s also an ideal choice for those doing regular business in Canada as it’s a subsidiary of the Canadian Toronto-Dominion Bank. One downside: You might be charged a small fee when you use non-TD ATMs.

Start-ups and sole proprietors located in the Southeast with light transaction volume who want great customer service may find just what they’re looking for at Bank OZK. This Little Rock, Arkansas, establishment offers small business bank accounts with 250 combined transactions per statement cycle (there’s a fee of 50 cents after that). Skip the $10 monthly service fee by maintaining a daily balance of $500 or more. Only $100 is required to open this non-interest-bearing account, but you will need to visit a physical branch to apply.

Located in Florida, New York, and New Jersey, Popular Bank’s Popular Checking account is a good fit for small businesses with moderate transaction volume earning up to $250,000 per year. The account includes up to 100 items per month at no cost as well as $5,000 in monthly cash deposits. (It’s 35 cents per hundred dollars deposited after.) Plus, this business checking account will waive the monthly $15 fee with an average monthly balance of $5,000 or more.

Veterans and military service members (as well as their immediate family) who join this national credit union and sign up for the Business Plus Checking program have access to 50 free non-electronic transactions per month (a fee of 25 cents per item applies after that), a competitive dividend rate (earned daily), and a 0.01% APY. This specific tier also has a low $8 monthly maintenance fee. While this program is a great deal for sole proprietors, it allows for unlimited signers, making this a solid option for smaller startup too.

With no minimum balance requirement and no monthly service charge, American First offers its members an astounding 1,000 free monthly transactions and up to $10,000 cash deposits per month through its Totally Free Business Checking account. You’ll also get a free detailed analysis of your account activity, which makes it even easier to keep tabs on your finances. Bring your completed application into an American First Credit Union branch to open your small business account, with just $50 as an opening deposit. Though there are only a few American First branches—all located in California—you can conduct routine transactions at any of 5,000 cooperative credit unions across the nation and have access to 30,000 no-fee ATMs.

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What do you need to open a bank account?

Jenn Jones

“Verified by an expert” means that this article has been thoroughly reviewed and evaluated for accuracy.

Updated 5:43 p.m. UTC Jan. 29, 2024

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Featured Image

Oscar Gutierrez Zozulia, Getty Images

A bank account is the most basic building block in personal finance, with nearly 95% of Americans owning one. Whether you’re opting for a new bank account, or thinking of getting one for the first time, the process is pretty straightforward: you’ll need to present a government-issued photo ID, provide some basic personal information and (sometimes) make an opening deposit.

What do I need to open a bank account?

You’ll need at least three things to open a bank account, maybe more, depending on the bank. If you’re going in person, double check you’ve got everything so you can get it done in one trip.

“I’d advise anyone looking to open an account to call ahead to make sure they have the necessary information ready and available,” said Jaspreet Chawla, the senior vice president of savings products at Navy Federal Credit Union.

Government-issued photo identification (ID)

Under federal law, banks and credit unions must verify your identity when you open an account. This is “for security purposes and to help the government fight terrorism and money-laundering activities,” said Lindsay Lawrence, executive vice president and chief operating officer for EverBank.

A government-issued photo ID helps satisfy that requirement. You can typically use your:

  • Driver’s license.
  • Military ID.
  • Passport or passport card.
  • Permanent resident card (also known as a Green Card or Resident Alien Card).
  • Foreign National ID.
  • Matrícula Consular Card.
  • Tribal or Bureau of Indian Affairs ID.

It could be good to have a couple of these on hand when you go to the website or walk into a branch. “Some financial institutions may require multiple forms of government ID,” Chawla said.

If you want to open an account for your child who doesn’t have a photo ID, you can typically show their birth certificate or Social Security card instead.

Personal information

Under federal law, the financial institution also needs to know your:

  • Legal name and date of birth.
  • Social Security number (SSN) or Individual Taxpayer Identification Number (ITIN).
  • Contact information, such as residential mailing address, phone number and email.

The bank can also use your contact details to send messages, monthly statements and tax forms so you can monitor your account automatically.

If some of your personal information doesn’t match what’s on your ID (you moved recently, say), the bank may ask for another form of ID.

A second form of identification could be: 

  • A recent pay stub or paycheck.
  • Your latest property tax statement.
  • The most recent utility bill with your name and address.
  • Bank statement.
  • Your birth certificate.
  • Your Social security card.

Opening deposit

While many financial institutions don’t have an opening deposit requirement, some want you to fund the account immediately.

“The minimum initial deposit is typically $25 to $100 per account opening, depending on the financial institution,” Chawla said.

Be sure you have enough cash on hand to meet any requirement, plus however much you’d like to deposit. When you’re ready, you can typically use:

  • Personal check.
  • Debit or credit card.
  • Electronic transfer from another bank account.

To do an electronic transfer, you’ll need the account number and routing number of the bank account from which you’re transferring the funds.

How much money do you need to open a bank account?

Minimum deposits vary by financial institution and can even differ by account type.

For example, Bank of America’s checking accounts have different opening requirements — you’ll only need $25 for the Bank of America Advantage SafeBalance Banking® account, but $100 for the Bank of America Advantage Plus Banking® . And Bank of America Fixed Term certificates of deposit require a minimum deposit of $1,000.

“But typically you can open an account with as little as $25,” said Amy Colton, a wealth advisor and partner at Forefront Wealth Partners. “Some banks even offer accounts with no minimum opening deposit.”

Banks that don’t require an opening deposit for at least one checking account and one savings accounts include:

  • Ally Bank .
  • Axos Bank .
  • Capital One .
  • Discover® Bank .

Oftentimes, student banking accounts don’t require a minimum. Just be sure to bring your student ID, report card or transcript to show that you’re eligible.

Account details are accurate as of January 29, 2024.

Types of bank accounts to consider

Here are the most common types of bank deposit accounts you can choose from:

  • Checking . Designed for everyday use, checking accounts allow you to regularly deposit and withdraw money using a connected debit card or paper checks. Some offer cash-back debit card rewards or pay a low annual percentage yield (APY).
  • Savings . You can put money that you don’t want to spend day-to-day in a savings account and have it earn more interest than what checking accounts typically offer. Note that some banks limit you to six transactions per month on the account and that rates fluctuate over time.
  • Money market account (MMA). An MMA blends features of a savings and a checking account. You could earn a high yield and still make transactions with a debit card and checks. Yet, you may find high minimum balance requirements and transaction limits.
  • Certificates of deposit (CD). In this type of specialized savings account, you typically make one upfront deposit and keep it in the account for a prespecified term, such as six months . In exchange for locking in your funds, you can earn a yield that’s usually higher than what other accounts offer. If you withdraw funds before the CD matures, you may pay a penalty.

Frequently asked questions (FAQs)

Opening a bank account is generally a quick process that involves filling out an application, providing the necessary documents and agreeing to the terms and conditions. It can take only a few minutes.

Yes, you can open bank accounts online. Depending on the institution, it may be your only option. If you’re not a fan of digital applications, however, many banks allow you to open one in person or over the phone.

Yes, it’s possible to start a bank account with no money. Some big names in banking offer accounts with no minimum opening deposit, including Capital One.

Blueprint is an independent publisher and comparison service, not an investment advisor. The information provided is for educational purposes only and we encourage you to seek personalized advice from qualified professionals regarding specific financial decisions. Past performance is not indicative of future results.

Blueprint has an advertiser disclosure policy . The opinions, analyses, reviews or recommendations expressed in this article are those of the Blueprint editorial staff alone. Blueprint adheres to strict editorial integrity standards. The information is accurate as of the publish date, but always check the provider’s website for the most current information.

Kim Porter

Kim Porter is a writer and editor who's been creating personal finance content since 2010. Before transitioning to full-time freelance writing in 2018, Kim was the chief copy editor at Bankrate, a managing editor at Macmillan, and co-author of the personal finance book "Future Millionaires' Guidebook." Her work has appeared in AARP's print magazine and on sites such as U.S. News & World Report, Fortune, NextAdvisor, Credit Karma, and more. Kim loves to bake and exercise in her free time, and she plans to run a half marathon on each continent.

Jenn Jones is the deputy editor for banking at USA TODAY Blueprint. She brings years of writing and analytical skills to bear, as she was previously a senior writer at LendingTree, a finance manager at World Car dealerships and an editor at Standard & Poor’s Capital IQ. Her work has been featured on MSN, F&I Magazine and Automotive News. She holds a B.S. in commerce from the University of Virginia.

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What’s required to open a bank account?

PayPal Editorial Staff

February 15, 2024

Six percent of Americans don’t have a bank account according to recent data from the Federal Reserve. 1 But opening one — or adding a supplemental account — can be an important step toward enhancing money management and creating a secure way to access money, make transactions, and save.

In this guide, explore some of the essential documents needed to open a bank account in the US and learn how to navigate the process.

What documents are needed to open a bank account?

Since bank accounts are tied to one’s identity and secure people’s money, sensitive personal information is typically required. Specific requirements may vary depending on the financial institution, but some documents generally needed to open a bank account are:

  • Personal identification:  Accepted documents may include a valid driver’s license, passport, state-issued ID card, birth certificate, employee ID card, and US military identification card, among others.
  • Social Security Card or individual taxpayer identification number: Depending on the account, financial institutions may request either a valid Social Security number (SSN) or individual taxpayer identification number (ITIN). Individuals can apply for an ITIN before going to a bank to open an account.
  • Proof of address:  Accepted documents may include a utility bill (e.g., water, electricity, gas), rental agreement or lease, mortgage statement, bank statement (from another bank), or credit card statement.

How to open a bank account

The process of opening a bank account is often relatively straightforward. Here is a general look at how it may work:

  • Choose a bank:  Research and select a bank or credit union. Consider factors such as location, fees, account types, and available services.
  • Gather required documents:  Collect the necessary documents and information, which typically includes two forms of identification and proof of address.
  • Confirm eligibility requirements:  Besides collecting the required documents, confirm the bank or credit union’s eligibility and age requirements.
  • Visit a branch or apply online:  Apply for the account in person at a bank branch or online through a bank's website. Many banks offer online account opening services for added convenience. Availability may vary depending on provider.
  • Complete application:  Fill out a bank's account application form and select the type of account, whether a checking account, savings account, or other type.
  • Review and agree: Carefully review the terms and conditions, account fees, and any other agreements related to the account.
  • Make an initial deposit:  If required by the bank, provide an initial deposit to fund the new account. The minimum deposit amount may vary depending on the bank and the type of account.

Types of bank accounts

From checking to savings accounts, there are several types of bank account options in the US. Here are some examples:

  • Checking account:  A checking account is designed for everyday financial transactions, allowing individuals to deposit and withdraw funds frequently, often with the convenience of a debit card  and check-writing capabilities.
  • Savings account:  A savings account is intended for individuals to save money over time, typically offering interest on the account balance and often restricting the number of withdrawals per month to encourage saving. Some banks and other financial platforms offer high-yield savings accounts — such as PayPal Savings  — that offer higher interest applied to funds held in the account.
  • Joint account:  A joint account is shared by two or more individuals, allowing all account holders equal access to funds, making it useful for couples or family members.
  • Minor's account:  A minor's account is typically opened for individuals under 18, often by a parent or guardian, with adult oversight and control until the minor reaches a certain age.
  • Online-only accounts: Online-only accounts are operated by digital banks with no physical branches, designed for flexibility and convenience.

Does it cost money to open a bank account?

While some bank accounts may not require any money to open the account, there may potentially be required deposits or ongoing costs that apply. The costs associated with opening and managing a bank account may vary depending on the bank and the type of account selected.

Potential expenses associated with bank accounts include:

  • Initial deposit requirements when opening an account
  • Monthly maintenance fees
  • Charges related to overdrafts, ATM usage outside the bank's network, or ordering checks and debit cards

Learn about managing money with PayPal .

Opening a bank account FAQ

Can you open a bank account without an id.

It’s generally not possible to open a bank account without proper identification in the US. Banks typically require a valid form of identification, such as a driver's license, passport, or state-issued ID, to verify the identity of an account holder and comply with legal regulations.

Can you open a bank account with a passport?

Someone may be able to open a bank account in the US with a valid passport as their primary form of identification. Passports are widely accepted by banks as proof of identity and are commonly used for this purpose when other forms of ID, like a valid driver's license, are not available.

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