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How to open a business bank account
Learn the steps and documentation needed to open a business bank account.
Not only is a business bank account more professional, but it makes it easier to file your taxes, track your cash flow and get a line of credit. Follow these six steps to open a business bank account.
Decide what type of account you need
The first step is to figure out what type of business bank account you need. A business checking account is good for daily expenses. It may come with a debit card, checkwriting privileges, merchant services and other perks to help you manage your money.
A savings account for businesses is better for storing excess capital. You’ll earn a competitive interest rate, but you may pay penalty fees if you need to tap into funds more than six times a month.
Find a bank
Once you’ve narrowed down what type of account you need for your business, it’s time to find a bank. Bank accounts vary wildly by institution. Some banks charge hefty monthly fees that you can’t avoid and others don’t charge any fees. You may find accounts that let you get started with as little as $0 while others may require opening deposits of $1,000 or more.
Write down your priorities — whether that’s a bank with a large ATM network, one that accepts cash deposits or one with unlimited transactions — and shop around until you find an account that checks all your boxes.
Gather your documentation
Once you’ve found a bank, it’s time to gather your documents. The exact documentation you need depends on your business structure. You’ll need your personal information, including your Social Security number and government-issued photo ID, along with your business formation documents.
Apply for your account
The bank’s website should list your options for opening an account. The most popular ways are online, in person or by phone.
The quickest way to open a business bank account is online. But you may want to visit a local branch if you’d like extra guidance.
If you have a business in the telemarketing, precious metals, gambling or government industry, you may be required to open your account in person.
Set everything up
Once your account is officially open, it’s time to set everything up. You’ll want to:
- Fund your account with an initial deposit.
- Switch over any direct deposits or bill payments to your new account.
- Connect your account to an accounting software to make bookkeeping a breeze.
What do I need to open a business bank account?
Here’s a list of the eligibility requirements and documentation you need to open a business bank account:
Every bank is different, but generally you can open a business bank account if you’re:
- At least 18 years old
- US citizen or resident
Opening a business bank account will require information about you and your company.
You’ll need to provide the following information for every individual listed on the account:
- Full name
- Date of birth
- Residential address
- Citizenship status
- Social Security number or Individual Taxpayer Identification number
- Government-issued photo ID
- Percent of company ownership
The business documents you’ll need depends on your entity type. Here’s what you’ll need to provide based on your company structure:
|Business type||Required documents|
|Limited liability corporation (LLC)|
|Limited partnership (LP) or limited liability partnership (LLC)|
How much money do I need to open a business account?
This table shows how much money you need to open a business bank account at several major US banks.
|Bank of America||$100|
|Citigroup||$0 to $1|
|TD Bank||$25 to $200|
How long does it take to open a business bank account?
It could take you less than 30 minutes to submit your application online if you have all your documents handy. The verification process could take a day or two and you’ll typically receive your debit card in the mail seven to 10 business days later.
If you open an account in person, it could take an hour or more to complete your application — and you may have to book an appointment in advance. But you could get your debit card on the spot.
Compare business bank accounts
Use the comparison table to compare business bank accounts by monthly fee, minimum deposit and ATM network.
Publisher to add comparison table.
Do I need a business bank account?
Anyone who owns a business should have a business bank account. Some business structures require you to have one. But if yours doesn’t, commingling your personal and business funds can create chaos.
The government could come after your personal assets if you’re sued or owe money to the IRS. And it creates a lot of headache come tax time because it’s harder to separate personal expenses from your business ones. Your accountant may also have a hard time figuring out which business tax deductions you qualify for.
Opening a business bank account may seem intimidating, but it’s actually quite easy. Once you find your bank, check to see if you can apply online, in person or over the phone. Then, gather your documents and apply. As always, compare the best business bank accounts before making a decision.
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