Kat Aoki is a personal finance writer helping consumers make better decisions with their home loans, credit cards, banking products and more.
Kat Aoki ContributorKat Aoki is a personal finance writer helping consumers make better decisions with their home loans, credit cards, banking products and more.
Written By Kat Aoki ContributorKat Aoki is a personal finance writer helping consumers make better decisions with their home loans, credit cards, banking products and more.
Kat Aoki ContributorKat Aoki is a personal finance writer helping consumers make better decisions with their home loans, credit cards, banking products and more.
Contributor Elizabeth Aldrich Banking WriterWith eight years of experience as a financial journalist and editor and a degree in economics, Elizabeth Aldrich has worked on thousands of articles within the realm of banking, economics, credit cards, investing, loans, personal finance and travel.
Elizabeth Aldrich Banking WriterWith eight years of experience as a financial journalist and editor and a degree in economics, Elizabeth Aldrich has worked on thousands of articles within the realm of banking, economics, credit cards, investing, loans, personal finance and travel.
Elizabeth Aldrich Banking WriterWith eight years of experience as a financial journalist and editor and a degree in economics, Elizabeth Aldrich has worked on thousands of articles within the realm of banking, economics, credit cards, investing, loans, personal finance and travel.
Elizabeth Aldrich Banking WriterWith eight years of experience as a financial journalist and editor and a degree in economics, Elizabeth Aldrich has worked on thousands of articles within the realm of banking, economics, credit cards, investing, loans, personal finance and travel.
Updated: Jul 17, 2024, 8:01pm
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If you recently started a business and you’re now sending and receiving payments, it’s time to open a business bank account. A business bank account can help you track expenses, manage invoicing and file taxes more efficiently.
More importantly, a business bank account can provide protections a personal bank account can’t, including limited personal financial liability and merchant protection for your customers. It can also help you establish business credit for future borrowing.
Here are the steps to open a business bank account, plus tips on how to choose a business bank account that meets your needs.
FEATURED PARTNER OFFERMinimum Deposit Requirement
Monthly Maintenance Fee
The monthly charge will be waived if you do any of the following: Maintain at least a $2,000 minimum daily balance in your account. Spend at least $2,000 on purchases with a Chase Ink business credit card. Receive $2,000 in deposits from QuickAccept transactions or other eligible payment methods Link a Chase Private Client checking account. Provide valid, qualifying proof of military status.
On Chase's WebsiteThe monthly charge will be waived if you do any of the following: Maintain at least a $2,000 minimum daily balance in your account. Spend at least $2,000 on purchases with a Chase Ink business credit card. Receive $2,000 in deposits from QuickAccept transactions or other eligible payment methods Link a Chase Private Client checking account. Provide valid, qualifying proof of military status.
*Offer DetailsThe documents you need to open a business bank account will depend on the type of business you operate. At a minimum, all business owners need to provide the following:
And, depending on the type of business, be prepared to provide the following.
The requirements to open a business bank account are similar across different types of financial institutions. Here are the basic steps.
If you haven’t already, you’ll need to get an official IRS EIN (Employer Identification Number). Also known as a tax ID number, an EIN is a unique number assigned to your business that’s used for tax reporting purposes.
Have any required documents, such as a government-issued photo ID or business license, ready before you go into a bank or apply online. Commonly required documents are explained below.
Depending on the financial institution, you can either bring your documents into a branch or open an account online by uploading your documents. Many accounts will also require an opening deposit, which you can often pay by check, credit/debit card or electronic transfer from another bank account.
There are four main types of business bank accounts. Here’s a breakdown of each type and what it’s best for.
The best business bank accounts offer low fees and a range of features to help you manage your business. Here are some factors to keep in mind as you narrow down your options.
Locations for in-person banking also matter. Consider how many branches and ATMs a bank or credit union offers around the country, especially if you regularly travel for business. Many credit unions participate in shared branch banking so you can take care of your banking in other states even if your credit union doesn’t have its own branches there.
Opening a business bank account lets you centralize your business finances in one place and keep them separate from your personal accounts. When business and personal finances are mingled, it can be more difficult to sort and track expenses. That can create headaches when it’s time to file taxes, especially if you’re ever audited.
A business bank account also lends legitimacy to your business. Should you need to take out a business loan, lenders may expect documents like profit and loss statements or cash flow statements. Documents like this are easier to prepare when you have a dedicated account for business deposits and withdrawals, and you’ll be able to create them with greater accuracy.
If you’re opening a business bank account for the first time, asking the right questions can help you narrow down your options.
Here are some of the most important things to ask yourself when choosing an account.
At the end of the day, the business bank account you choose should provide the features and benefits you need most to stay on top of your finances.
Find The Best Business Bank Accounts Of 2024
You can open a business bank account in just a few minutes if you’re getting started online. Opening a bank account at a branch may take a little longer if you have to wait for a banker who can get your account set up. Organizing all of your required documents and information beforehand can help to streamline the process regardless of which bank you choose.
Sole proprietors are not required to have separate business bank accounts, but they could still be worth having to simplify expense tracking and tax preparation. If you’re a sole proprietor, you might look for a basic business checking account with minimal fees that you can use to accept payments from customers and pay expenses.
The FDIC treats business bank accounts the same as personal accounts for insurance purposes. If you open a business bank account, your deposits are covered up to $250,000 per financial institution. Under FDIC rules, all deposits owned by a corporation, partnership or unincorporated association at the same bank are combined and insured up to $250,000, separately from any personal accounts held by owners or members.
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ContributorKat Aoki is a personal finance writer helping consumers make better decisions with their home loans, credit cards, banking products and more.
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