What information is required to open a business bank account

Opening a business bank account often takes just a few minutes, but it’s important to be prepared and know what kind of account you should get, the possible fees that may apply with that account, where you should get it, and what documents you’ll need to apply.

To help ensure you’ve got all the right documents, we’ve prepared a free downloadable checklist of required documents by corporate structure for your convenience.

Step 1: Gather Required Documents

Before you decide where to set up your bank account, make sure you have all of the necessary documents ready in advance. We’ve listed the most common requirements for each business type as well as the requirements that all business accounts will have.

General Business Bank Account Requirements

• Personal identification: Regardless of the entity type of your business, all signers on a business account will need to provide their Social Security number and another form of government-issued identification, such as a driver’s license or passport.
• Business identification: With the exception of sole proprietorships, you’ll be required to provide a federal employer identification number (EIN) for your business.

Sole Proprietorship Business Bank Account Requirements

• Fictitious business name certificate: Sole proprietorships will need to furnish a fictitious business name certificate, also known as a doing-business-as certificate (DBA certificate) if your business operates under a different name than your own.

Partnership Business Bank Account Requirements

• Organization documents: These include your business partnership agreement and any other organization documents that you may have prepared when you formed your partnership.
• Other potential documentation: You may also need to provide a signed declaration of unincorporated business and any required business licenses. Business licenses are common with healthcare businesses or restaurants.

Corporation (S Corporation & C Corporation) Business Bank Account Requirements

• Articles of incorporation & bylaws: A copy of your certified articles of incorporation will be required. Some banks may also require a current copy of your bylaws.
• Corporate charter: If your articles of incorporation don’t provide sufficient information regarding who is authorized to sign, you may also need to provide an additional corporate charter that specifies this information.
• Corporate resolution: You might also need to provide a corporate resolution signed by all of your officers as well as a signature card signed by the account signers.
• Business licenses: Some banks may require you to provide a business license.
• Additional requirements for nonprofits: If you’re operating as a nonprofit organization, you’ll need to show your 501(c) letter from the IRS or other tax-exempt documentation.

Limited Liability Company Business Bank Account Requirements

• Articles of organization: Similar to articles of incorporation, you’ll be required to provide a certified copy of your articles of organization. This document may also be referred to as a certificate of organization in your state.
• Operating agreement: You’ll need to provide an operating agreement that states those members of the limited liability company (LLC) who have the authority to transact business.
• Other potential documentation: Banks may also require you to provide your current business license.

Note: To help ensure you’ve got all the right documents, we’ve prepared a free downloadable checklist of required documents by corporate structure for your convenience.

Step 2: Select the Right Bank Account

Both traditional banks and online banks offer similar accounts but may vary in fees and additional services they provide. Typically, online banks are often a better choice for businesses with no cash deposits and can largely bank via online payments. Traditional banks tend to offer a wider variety of banking products and services, and more customer service options, including in-person, phone, and live chat.

Free Business Bank Account

Many banks may charge a monthly fee to maintain a business checking or savings account that can be waived by meeting balance requirements or avoiding excessive cash or transaction limits. Some banks may even offer a business account with fewer restrictions. Keep in mind that having a free business checking account doesn’t mean you won’t be assessed any fees at all. For example, you could still be charged for excess transactions, wire transfers, and overdrafts.

Traditional Small Business Checking Account

A traditional small business checking account includes the ability to make deposits and withdrawals, write checks or make electronic funds transfers, and make purchases and cash withdrawals with a debit card. Typically, there are maintenance fees, transaction fees, ATM fees, and deposit fees. Many of these may be waived based on the size of the relationship or avoiding out-of-network ATMs. Chase ranks among our best banks for small business and is one traditional bank option worth considering.

Online Business Checking Account

An online business checking account is a good choice for businesses that don’t need to visit a physical branch or handle daily cash transactions as these accounts typically don’t allow for cash deposits. Also, most online-only accounts are fee-free or allow you to avoid monthly account fees by maintaining a monthly minimum balance.

One very good online business checking account to consider is with Bluevine. Bluevine lets you apply and submit your documentation completely online, taking just a few minutes to complete. You can earn a 1.50% annual percentage yield (APY) on qualified balances of up to $100,000. Bluevine Business Checking comes with no monthly fees, no minimum opening deposit, and unlimited transactions.

Visit Bluevine

Business Savings Accounts

A savings account is a stable place to keep your money while it earns interest. You may want to use it to set aside funds for future needs, such as equipment or expansion. Evaluate account terms, including APY, account fees, and balance requirements, to find the best business savings account for your needs.

Think About Entire Financial Needs for Your Business: You may want to consider opening a business bank account along with additional business products at the same time for a more streamlined and efficient way to manage your business, rather than using different vendors or banks for different services. For example, combining your business bank account with your business credit card and credit card processing may give you access to discounts and allow for easier product and service integration.

Step 3: Find the Best Bank

Here are some factors to consider when you’re thinking of how to choose a bank for your small business:

• Existing banking relationship: If you have an existing relationship with a bank, it may be more convenient to open a business bank account with the same bank. Their knowledge of your banking relationship may be useful should you need a business loan given character is one of the five C’s that lenders look at with credit decisioning.
• Mobile and online experience: If you prefer the convenience of banking online, confirm that your bank offers a good online experience, including online bill pay, electronic funds transfers, and mobile deposits. You may also want to know if third-party applications, such as QuickBooks are easily integrated into a bank’s website or app.
• Fees: Consider the fees the bank may charge, such as monthly maintenance, cash deposits, transactions, and ATM use. Also, consider if they’ll reimburse you for out-of-network ATM fees.
• Convenience: Make sure the location of the branches and the number of ATMs suit your needs.
• Support for future needs: If you expect you’ll need more than just a checking account, make sure your bank offers other deposit accounts―such as savings, certificates of deposits (CDs), and money market―small business loans, lines of credit, and credit cards.

If you’re not quite sure where to turn, look at our recommendations for the best banks for small businesses to help you.

In some situations, you may need to find a bank that doesn’t use ChexSystems based on several factors. About 20% of financial institutions, mostly online banks and financial technology companies (fintechs), don’t use ChexSystems as part of the account application and opening process.

Step 4: Learn the Account’s Possible Costs

Many banks waive fees if certain criteria are met, such as maintaining a minimum balance, using bill pay, or keeping within transaction limits. Be sure to find out if the account will charge transaction fees, early termination fees, or minimum account balance fees.

Typical Business Checking Account Fees

• Monthly fee ($0 to $95 per month): Flat fee that’s waived if certain criteria are met, such as maintaining a minimum balance or combined balances across the entire bank relationship
• Transaction fee (40 to 50 cents per transaction): Fee that’s assessed if the number of transactions exceeds the monthly limit, which typically starts at 100 monthly transactions

Typical Business Savings Account Fees

• Monthly fee ($0 to $15 per month): Flat fee that’s waived if you meet certain criteria, such as maintaining a minimum balance or linking your savings account to a checking account
• Monthly balance transfer fee ($5 to $20 per transaction): Per-transaction charge if you exceed six withdrawals per month

Other Business Bank Account Fees

• Cash deposit fee (varies): Fee that’s charged if cash deposits exceed the monthly allowance, which often starts at $5,000 a month. Depending on the financial institution, this can be priced as a percentage, typically 2 or 3%, or a flat fee, up to $5 per deposit
• ATM fee ($2 to $3 per transaction): Charge for ATM transactions at out-of-network ATMs. Keep in mind that out-of-network ATMs may charge their own separate fee for ATM usage
• Wire transfer fee (up to $45 per transaction): Fee assessed on domestic and international incoming and outgoing wire transfers, with outgoing international wire transfers being the most expensive
• Statement fee (up to $5 per statement): This fee is assessed by some banks for your monthly bank statement to be paper-generated, typically waived by having the statements emailed to you each month

Step 5: Open Your Account Online or in Person

Now that you have all your documentation assembled, you’re ready to open your business bank account. Whether you choose to apply online or in person, have the required documents for your specific company structure ready to show or to submit on the bank’s website. You may prefer to visit a branch to receive face-to-face customer service. Online-only accounts typically offer a customer service phone number, live chat, and, sometimes, a video call.

Step 6: Deposit Your Funds

Once you’ve opened your business account, the last step is to deposit funds. You can do this with an electronic funds transfer from another account, writing a check to your business, or depositing cash. Once that’s done, your account is ready to use.

If your business accepts checks as payments, most banks offer mobile deposit―sometimes called remote deposit or remote deposit capture―which can be done through a mobile banking app on a smartphone. If you anticipate large volumes of checks, inquire about getting a check scanner so that you can scan many checks at a time easily. Your bank may charge you a monthly fee to use the scanner.

Benefits of Opening a Business Bank Account

• You can accept credit card payments: Credit card payments cannot be accepted with a personal bank account―only with a business bank account.
• Separate your business and personal finances: Keeping your business and personal bank accounts separate can help you manage your cash flow and make it much easier to track the financial health of your business. This will make it easier on your accountant, tax preparer, and you come tax season since your business finances will be separated from your personal.
• Build a business banking relationship: If you need a loan, line of credit, financial advice, or other resources, building a relationship with your bank means you can get personalized help to reach your business goals.

Bottom Line

Establishing a business bank account is often an important decision as it helps establish or enhance your relationship with a bank. Being prepared with all the documents and information required before opening an account, you can ensure a smoother process at the bank or online. It’s also a really good idea to know what fees may be assessed and how to avoid those fees if possible. Be sure to see if the bank has any introductory offers or bonuses that your business can benefit from.