Facebook Email icon An envelope. It indicates the ability to send an email.
Email Twitter icon A stylized bird with an open mouth, tweeting.
Twitter LinkedIn icon
LinkedIn Link icon An image of a chain link. It symobilizes a website link url.
Copy Link lighning bolt icon An icon in the shape of a lightning bolt.
Save Article Icon A bookmarkAffiliate links for the products on this page are from partners that compensate us and terms apply to offers listed (see our advertiser disclosure with our list of partners for more details). However, our opinions are our own. See how we rate banking products to write unbiased product reviews.
If you've started your own business, you may be ready to open a business bank account.
The U.S. Small Business Administration recommends opening a business bank account once you're ready to spend money or begin collecting income. Having a business bank account will give you the chance to manage your finances more professionally.
Whether you're a freelancer, small business owner, or full-scale corporation executive, a business bank account is an important stepping stone to becoming a fully-fledged business.
Ultimately, business bank accounts help separate personal finances from your business finances. When you file taxes for your business, you'll need to have a clear idea of your operations throughout the year. A business bank account is an ideal place for documenting income and expenses.
When you're managing daily operations, you want to be able to conduct your business professionally. Once you've developed a formal business plan and received the necessary certificates and licenses for your business, opening a business bank account will be the next step.
Business banking has similar account options to personal banking. These are the most common business bank accounts available at most banks:
You'll want to choose business banking options that best fit your goals. Pay attention to interest rates, minimum opening deposits, balance requirements, monthly bank maintenance fees, and transaction fees. These details can vary between bank accounts and financial institutions.
As a business owner, your financial needs are likely to evolve. Consider what other financial products banks offer that you may need to use in the future, such as business loans or lines of credit. Find out whether the bank has business advisors or loan experts who have expertise in your industry.
All owners of the business must come together to open an account and bring personal documentation for business banking.
Like with a personal bank account, you'll need to provide government-issued ID, such as a driver's license or passport.
Depending on where you live and the type of business you own, federal and state business licenses and permits will be mandatory to establish your business.
When you open a business account, make sure to bring any business licenses you have. These indicate that you are following state and federal laws.
An EIN is necessary for any business that is considered a partnership or corporation.
You'll need an EIN to open a business account if you aren't the only person in charge of your business. Sole proprietors can use their SSN instead of an EIN on a banking application or a business credit card application.
If you currently don't have an EIN and aren't the sole owner of your business, you can apply for one using the IRS website. You can get your EIN the same day you fill out the application online.
Every business owner needs to provide basic business information to open a bank account, including the business name and address.
You may also need additional business documentation to open an account depending on your type of business and where you bank.
If you're part of a partnership, you may be asked to provide a partnership agreement or certificate of the limited partnership. If there isn't a formal partnership agreement, you'll have to make a written document that states a formal partnership hasn't been formed.
Business owners of a limited liability company or corporation may need additional documents that outline their business agreements and operations, like an LLC operating agreement or corporate bylaws.
Application processes vary by bank and account type. Applying online may be easier if you're the sole business owner, but be prepared to provide additional documents.
If there are multiple owners who will need access to the new account, it may be easier to visit a bank branch and work with a bank representative in person. This will also give you the opportunity to ask questions as you go and start to build a relationship.
Download the bank's app as soon as your account is set up so that you can monitor your balance, deposits, and transactions on the go. Consider setting up alerts to stay on top of your balance requirement.
Why do I need a separate bank account for my business? Chevron icon It indicates an expandable section or menu, or sometimes previous / next navigation options.
Separate bank accounts can help when it comes to tax reporting and filing and boost the credibility of your business.
What is an EIN, and why do I need it to open a business account? Chevron icon It indicates an expandable section or menu, or sometimes previous / next navigation options.
An Employer Identification Number (EIN) is a federal tax number that identifies your business to the IRS. Most banks require one to open a business account.
Can I open a business bank account online? Chevron icon It indicates an expandable section or menu, or sometimes previous / next navigation options.
Yes, many banks have online applications for deposit accounts, including business accounts.
What should I look for when choosing a bank for my business? Chevron icon It indicates an expandable section or menu, or sometimes previous / next navigation options.
Consider fees, the interest rate, accessibility online and in person, and online banking services and features.
How much money do I need to open a business bank account? Chevron icon It indicates an expandable section or menu, or sometimes previous / next navigation options.
Initial deposit requirements vary by bank, from $0 to $100. There may be separate daily minimum balance requirements for avoiding common bank fees or earning interest.
Western Alliance Bank High-Yield Savings Premier Take advantage of today's rates and earn 5.31% APY on your entire account balance
5.31% annual percentage yield (APY) is accurate as of 7/11/2024 and subject to change at the Bank’s discretion. Minimum deposit required to open an account is $500 and a minimum balance of $0.01 is required to earn the advertised APY.
Editorial Note: Any opinions, analyses, reviews, or recommendations expressed in this article are the author’s alone, and have not been reviewed, approved, or otherwise endorsed by any card issuer. Read our editorial standards.
Please note: While the offers mentioned above are accurate at the time of publication, they're subject to change at any time and may have changed, or may no longer be available.
Sign up to get the inside scoop on today’s biggest stories in markets, tech, and business — delivered daily. Read preview
