How To Open a Business Bank Account in a Few Easy Steps

By Milica Milenkovic

June 19, 2023

Setting up a business can be a lengthy process filled with challenges and tough decisions. A business bank account is required for the majority of businesses, whether it’s a small business, a sole proprietorship, or a large corporation. However, before opening an account, there are some factors you should consider to ensure that you’ve picked the best option.

We’ll go over the benefits of having a business account, how to open a business bank account with the proper documentation, as well as how to pick the account and bank that will be tailored to your needs.

Benefits of Setting Up a Business Bank Account

A business bank account can facilitate your business ventures and is a requirement for some types of enterprises. Even if you’re a sole proprietor, having an account for your business offers a number of advantages that a personal bank account simply can’t provide.

You Can Separate Your Business and Personal Funds

Having separate accounts allows you to keep better track of your company’s financial records and income. Additionally, using a single account for your business and personal assets puts your personal savings at greater risk in case legal proceedings are initiated against your company. Therefore, it’s a wise decision to protect your personal savings by having an independent small business bank account.

You Can Accept Payments via Credit Cards

Accepting and processing credit or debit card transactions is not possible with a personal bank account. Sticking with personal accounts may limit your clients’ payment options, as they will only be able to pay with checks or cash, which could be inconvenient for some. 

Others Can Access Your Business Funds

You probably won’t be the only one who needs to use the company’s funds. When you open a business banking account, you can give your employees access to it, allowing them to execute numerous financial transactions on the company’s behalf. After all, using your personal bank accounts with your business partners and colleagues is inconvenient.

You Can Get Personalized Banking Assistance and Appear More Professional

Developing a business relationship with your bank ensures that you’ll receive personalized assistance in achieving your company objectives. You can obtain valuable financial guidance, and getting a line of credit or a loan will be a lot easier. Clients may also feel more comfortable making payments to a company rather than to you personally.

Decide on the Account Your Business Needs

Traditional and online banks provide a similar range of banking accounts, however, their specific services and rates may differ. The advantage of a traditional bank is that there are more products to choose from, and the customer service is better, while an online bank is more convenient for clients who prefer to do everything remotely. Your business might need more than one type of bank account, so let’s check out some of the most common options for opening business accounts.

Business Savings Account

If your company doesn’t plan on spending the money immediately and would rather invest it in the future, a business savings account is the way to go. Over time, money in a savings account earns interest, however, those funds might be more difficult to access. 

Business Checking Account

Checking accounts are designed primarily for receiving and making payments. In this case, finding the right checking account for your small business is crucial. You also have the option of opening an online checking account if your business doesn’t plan on dealing with cash transactions.

Business Merchant Account

Merchant accounts are ideal if your business plans on accepting debit and credit card payments. They are a secure way for you to accept electronic payments. For this type of account, you must partner with a merchant acquiring bank, which acts as an intermediary when it comes to processing credit and debit card payments.

What Do You Need To Open a Business Bank Account?

Ensure you have all of the relevant documentation ready before deciding where to open your bank account. The documents you’ll need will vary depending on the legal form of your business, and we’ll go over some of the most common ones.

Your Personal ID

Every signer on a business bank account must submit their Social Security number and an ID document, such as a passport or driver’s license, regardless of the business type. This step is the same as opening a personal bank account.

Social Security Number or Employer Identification Number 

Nowadays, the majority of banking institutions need business clients to supply their EIN to open a business savings or checking account. In order to apply for an EIN (if you don’t have one), you need to fill out an application form on the IRS website with a valid SSN. In some cases, sole proprietors are allowed to open a small business account using only their SSN.

Your Company’s Formation Documents

These documents should contain essential information about your business, like the name of the person in charge of financial management, the company’s structure, and how it will operate. For a corporation, articles of incorporation are necessary, whereas for an LLC, articles of organization are required.

Business Licenses

Before you can open a bank account for your business, the bank will request documentation that your company has all the necessary licenses to operate. Of course, the procedures for obtaining a business license differ by location, so it’s advisable to do some research before submitting your documents.

Monthly Credit Card Income

Businesses that need to process credit and debit card payments and transactions usually opt for merchant accounts. Accordingly, they need to provide the bank with their credit card revenue on a monthly basis. 

Choose the Right Banks for Business Accounts and Apply

After you’ve decided on the types of bank accounts that are suitable for your enterprise, you’ll need to pick the right bank that will suit your business requirements. We’ll list some of the key factors you should consider before making a decision.


Business banking accounts usually come with monthly maintenance fees, ATM fees, cash deposit fees, and wire transfer fees. If you exceed your monthly transaction limit, you may also be charged per-transaction costs. These fees and their impact on your business are important factors to consider when choosing the bank.

Tools for Account Management

A good business account should allow you to make payments on the go, check your balance, and transfer funds from one account to another. All of this should be possible through a user-friendly smartphone app, an online account, or a third-party application provided by the bank of your choosing.

Interest Rates

If you opted for a business savings account, then interest rates are of primary importance. Certain business checking accounts also provide interest, so be sure to compare the rates and other criteria before making a commitment.

Variety of Bank Accounts

Not only do you need a bank that offers the business bank accounts you require right now, but you should anticipate the future requirements of your business as well. For example, make sure your bank offers lines of credit or a business credit card if you think you’ll need them in the long run.

Branch and ATM Locations

As part of your preliminary research, you should look into each bank’s map of branch and ATM locations. Some may be closer to your area and therefore more convenient, so it’s definitely worth exploring.

Deposit Your Funds and Start Banking

You’re ready to open your company bank account now that you’ve chosen a bank and account type, and gathered all of the paperwork for your business entity. Applying for an account shouldn’t take long, and you can do it online in most cases. It’s a good idea to double-check all the information so you don’t encounter any problems with the IRS or your bank afterwards.

Depositing money in your business banking account is the final step of this process. Usually, you’ll be asked for a minimum deposit, which can be made by submitting cash, transferring money from some other account to yours (via wire or electronic transfer), or by a check payable to your business.

Final Thoughts

If you’re planning to grow your business and turn it into a profitable venture, creating a business bank account will be a necessary step toward that goal. By describing the procedure in detail, we hope to have made the process of how to create a business bank account easier for you. It just requires you to take several factors into consideration, and opt for the one that is perfect for your business needs. As a result, you’ll be able to focus on your bread and butter, safe in the knowledge that your finances are in good hands.


Can I open a business bank account without an EIN?

Legally, you can open a business bank account without an EIN if your business is a sole proprietorship or a single-member LLC. However, since the majority of banks require you to have an EIN, you’ll almost certainly require one at some point.

Can you open a business bank account online?

In most cases, opening a business account online is faster and easier than going to the bank and filling out an application in person. Completing and submitting your online form shouldn’t take longer than a few minutes, although that time may vary from bank to bank.

What documents are needed to open a business bank account?

The following are some of the most typical documents needed to open a new business bank account:

  • Employer Identification Number or Social Security number
  • Personal identification documents
  • Business licenses
  • Ownership agreement
  • Monthly credit card revenues
  • Certificate of assumed name

Is it hard to open a business bank account?

Although securing commercial lines of credit and financing for your business may be difficult in certain cases, opening a business bank account is relatively easy, given that you may open a basic account even with poor credit.

What is the easiest way to open a business account?

Learning how to open a business bank account is a simple and straightforward process, regardless of the type of business you own. First and foremost, you should carefully select a bank and account type, and gather all the documentation needed for your business entity. Once you’ve collected everything, you can set up the account online or in person. Finally, remember to double-check all of your information, as accuracy will save you time down the line.

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