What you need & how to open a business bank account

Small business owners, including sole proprietors, typically need to open a business bank account to keep business and personal financial activities separate. Opening a business bank account also comes with other benefits, like streamlined accounting, a boost to your company’s credibility, protection of your personal assets, and helpful banking services like business loans, credit cards, and lines of credit.  

Keep reading to learn how to open a business bank account and what type of information you need to apply.  

How do you open a business bank account?

Opening a business bank account is a straightforward process. But before you can open an account for your company, it’s important to follow these steps. 

1. Determine what kind of account you need

Businesses can usually choose from several different kinds of accounts, including checking, savings, or merchant services. While checking and savings accounts are common and can be used by most businesses, a merchant services account is a special type of bank account designed to accept credit card payments from customers. These are usually linked to a checking account.  

Depending on your business structure, you may be legally required to have a certain type of account. If you’re not sure what type of business account you need, consider talking to a business advisor like a certified public accountant (CPA), lawyer, or bank representative.  

2. Shop around  

You can find business bank accounts at banks, credit unions, and online lenders. When selecting an institution, it’s important to consider if you need access to a physical branch or prefer to bank online. Rates, fees, minimum balance requirements, and other account features can vary widely between banks, so be sure to compare:   

• Special introductory offers 

• Interest rates for savings accounts, checking accounts, and lines of credit 

• Monthly account fees 

• Transaction fees for incidentals like wire transfers, nonsufficient funds, and overdrafts 

• Minimum account balance fees 

• ATM access 

• Branch access 

• Bill pay features 

• Accounting software integration capabilities 

• Additional products like credit cards and small business loans 

3. Prepare your documents 

Before you apply online or head to your local bank branch to open a business bank account, you’ll need to gather some important documents. Requirements can vary from bank to bank, so it's a good idea to confirm them with the bank in advance. You can often find a list of required documents on a bank’s website, or you can call the bank to ask.  

4. Fund your account 

Some banks may let you open a business account for free, but you’ll typically need to make an initial deposit. If a deposit is required, be sure to have cash or check handy. If you open a business account at the same bank where you do your personal banking, you may be able to transfer funds from one account to another.  

What do you need to open a business bank account?

Preparing your information and documents ahead of time can help ensure a seamless experience when opening a business bank account. While requirements differ between banks, here’s a closer look at what’s commonly needed to open a business bank account.  

Employer identification number (EIN) 

The Internal Revenue Service (IRS) uses your employer identification number, or EIN, to identify your business entity. (You may see these listed as a “federal tax identification number,” and they’re the same.) If you don’t have one already, you can apply for a free EIN online through the IRS. Sole proprietors may be able to use their Social Security numbers to open a business account instead.  

Business formation documents 

Most business types, including partnerships, S-Corporations (S-Corps), and limited liability companies (LLCs), have formation documents that define the structure of the business. Sometimes called articles of incorporation, your formation documents establish your company’s legal structure. Sole proprietors don’t need articles of incorporation.  

Ownership agreements 

Certain types of business structures, like S-Corps and LLCs, are required to designate ownership in the company. Ownership is usually demonstrated by partnership or membership interest in a company or by issuing shares of stock. Ownership agreements outline how ownership is distributed among company owners.  

Personal identification 

You’ll likely need to present at least one government-issued photo ID, like a driver’s license or passport, to open a bank account. Some banks require two forms of identification, so be sure to check what’s required with your bank.  

Business license 

Many types of businesses are required to obtain a license to operate. Regulations can vary by industry and local laws, but if your business does require a license, you’ll likely need to have this handy when you open a business account.  

DBA certificate 

Some businesses are required to register the company’s trade name (also called a fictitious or assumed name) with a “doing business as” or DBA certificate. Requirements vary depending on where your business is located and your company’s legal structure. But if you do have a DBA certificate, be sure to bring it along when you open your business account.  

5 benefits of opening a business bank account

Whether you’re running a small business, freelancing, or taking on a side gig hustle, a business bank account can help your small business in many different ways. Here’s a closer look at some of the key benefits to opening a business bank account.   

1. Streamlined financials: A business bank account allows you to easily keep business bookkeeping separate from your personal finances. You can use your account to track sales and expenses, pay bills, or send wire transfers. Plus, you can often link your account to your preferred accounting software and authorize employee access to the account.   

2. Liability protection: Certain types of business structures, like S corps or LLCs, may be required to have a business account to ensure personal and company finances remain separate.  

3. Payment processing: Linking a business account to your company’s payment processing platform can help you keep business payments separate from personal transactions. This is especially important when tracking sales for tax purposes.  

4. Professional image: A business bank account can give your business a boost in credibility and help you build trust with customers and vendors—especially if you order checks with your business logo or add your branding to your payment experience.  

5. Access to other financial tools: Once you have a business account, you may be able to get a business debit card, credit card, loan, or line of credit through the same bank.  

The bottom line 

If you’re a business owner, it’s a good idea to do your banking through a business bank account, instead of your personal checking or savings account. With many banks to choose from, it pays to do your research to find a bank that will meet your business’s financial needs today—and as your business grows. For instance, you can start with a business checking account and add a savings account or business credit card down the line. Your accountant can help point you in the right direction if you’re unsure where to start or what type of business account you may need.