How to choose and open the right business bank account, comparing fees, features, and requirements across banks, credit unions, and online options.
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Determine Your Banking Needs
Estimate your monthly transaction volume
Track deposits, withdrawals, and payments you expect each month. Many free business checking accounts limit you to 200-500 transactions per month, with overage fees of $0.25-$0.50 per transaction.
Estimate your average monthly cash balance
Some banks waive monthly fees if you maintain a minimum balance of $1,500-$5,000. If your balance will fluctuate below the minimum, calculate whether the monthly fee ($10-$30) is less than you would earn in interest.
Identify must-have features for your business
Prioritize features that match your business model: check deposit (mobile vs. in-branch), cash deposit capability, wire transfer frequency, international payments, and integration with your bookkeeping software.
Decide if you need cash deposit capabilities
Determine if you need international wire transfer access
Decide between a traditional bank, credit union, or online bank
Traditional banks offer in-person service and cash handling. Credit unions typically charge lower fees and offer better interest rates. Online banks often have no monthly fees but cannot accept cash deposits.
Compare Account Options
Compare monthly maintenance fees across 3-5 banks
Monthly fees range from $0 at online banks to $15-$30 at major banks. Most fees can be waived by meeting a minimum balance ($1,500-$5,000) or minimum monthly deposit requirement. Calculate total annual cost including potential overage fees.
Compare transaction limits and overage charges
Free accounts typically allow 200-500 transactions per month. Premium accounts ($20-$50/month) often include unlimited transactions. If you process 300+ transactions monthly, a premium account may save money versus overage fees.
Check cash deposit policies and fees
Many banks include $5,000-$10,000 in free monthly cash deposits, then charge $0.15-$0.30 per $100 after that. If your business handles significant cash, this fee can add up to hundreds of dollars monthly.
Evaluate the mobile app and online banking features
Test each bank's mobile app before opening an account. Key features to check: mobile check deposit limits (most start at $5,000-$10,000 per day), real-time notifications, and the ability to initiate ACH transfers from the app.
Check integration with accounting and payment software
Verify that the bank supports direct feeds to your accounting software, which eliminates manual data entry. Most major accounting platforms connect to the top 50 banks automatically. Smaller banks may require manual CSV imports.
Gather Required Documents
Obtain your EIN confirmation letter (CP 575)
This is the letter the IRS issues when you receive your EIN. If you lost it, the IRS can verify your EIN over the phone at 800-829-4933, but some banks specifically require the original CP 575 letter.
Get copies of your business formation documents
Banks require Articles of Organization (LLC), Articles of Incorporation (corporation), or DBA filing (sole proprietorship). Bring certified copies — some banks will not accept photocopies. Certified copies cost $5-$20 from your Secretary of State.
Bring your operating agreement or corporate bylaws
For multi-member LLCs or corporations, the bank needs to verify who is authorized to manage the account. Your operating agreement or bylaws should clearly state which members or officers have signing authority.
Have government-issued photo ID for all account signers
Banks verify the identity of every person who will have access to the account. Bring a valid driver's license or passport. If a signer cannot visit the branch, most banks require a notarized authorization form.
Open and Configure the Account
Make your initial deposit
Most business checking accounts require an opening deposit of $25-$100. Some premium accounts require $500-$1,000. Transfer your initial deposit from a personal account — this establishes your first paper trail of business funding.
Set up online banking and download the mobile app
Enable two-factor authentication immediately to protect your account. Set up email or push notifications for all transactions above $0 during your first month to spot any unauthorized activity early.
Order business checks and a debit card
Banks charge $20-$50 for business checks. Third-party check printers are often 40-60% cheaper for reorders. Set a daily spending limit on your debit card to minimize exposure in case of theft.
Connect your account to your accounting software
Set up the bank feed within 24 hours of opening so transactions import automatically from day one. Categorize the first few transactions manually to train the software's auto-categorization feature.
Set up authorized users and access levels
If employees need account access, most banks let you set view-only versus full access permissions. Review access levels quarterly and remove former employees immediately upon their departure.
Additional Accounts to Consider
Open a business savings account for tax reserves
Set aside 25-30% of every payment you receive into a separate savings account for taxes. Business savings accounts earn 0.5-4.5% APY depending on the bank. Online banks consistently offer the highest rates.
Apply for a business credit card
Use a business credit card for all recurring expenses to earn 1.5-2% cash back and build business credit. Pay the full balance monthly — business credit card interest rates average 18-26% APR.
Consider a merchant services account if accepting card payments
Payment processors charge 2.6-2.9% plus $0.10-$0.30 per transaction. Many banks offer integrated merchant services, but third-party processors often have lower rates. Compare at least 3 options before committing.
Frequently Asked Questions
Can I use a personal bank account for my LLC?
Legally, yes for sole proprietorships. For LLCs and corporations, mixing personal and business funds (commingling) weakens the liability protection your entity provides. Courts regularly pierce the corporate veil when owners fail to maintain separate finances. Most business banking experts and attorneys agree that a dedicated business account is non-negotiable for any LLC, regardless of size.
What documents do I need to open a business bank account?
Most banks require your EIN confirmation letter (CP 575 from the IRS), Articles of Organization or Certificate of Incorporation, a government-issued photo ID for each signer, and your operating agreement (for LLCs with multiple members). Sole proprietors with a DBA need their DBA registration certificate. Some banks also request a business license and proof of address. Call ahead — requirements vary between institutions.
Are online-only business banks safe to use?
Online banks like Mercury, Relay, and Bluevine are FDIC-insured up to $250,000 per depositor, the same protection traditional banks provide. Some offer extended FDIC coverage through sweep networks, protecting $1-$5 million or more. The tradeoff is that online banks typically cannot handle cash deposits and may have limited phone support. They work well for service businesses and e-commerce; cash-heavy businesses like retail stores and restaurants need a traditional bank with branch access.
How many business bank accounts should I have?
At minimum, two: one checking account for daily operations and one savings account for tax reserves (set aside 25-30% of revenue). Many small business owners add a third account for payroll and a fourth for emergency reserves (3-6 months of operating expenses). Keeping funds separated by purpose prevents accidentally spending money earmarked for taxes or payroll.
What fees should I watch for with business bank accounts?
Common fees include monthly maintenance ($10-$30, often waivable with minimum balances), excess transaction fees ($0.25-$0.50 per transaction above the monthly limit), wire transfer fees ($15-$30 domestic, $35-$50 international), cash deposit fees ($0.25-$0.30 per $100 deposited), and early account closure fees ($25-$50 if closed within 90-180 days). Online banks like Mercury and Relay charge zero monthly fees, while traditional banks often require $1,500-$5,000 minimum balances to waive theirs.