Banking & Switching

Mar 202610 min read

How to Open a Business Bank Account: Step-by-Step Guide

Everything you need to open a business bank account — required documents, how to choose a bank, online vs in-person setup, and common mistakes to avoid.

Jason Garcia

CEO & Co-Founder

Reviewed by

Mahalia Thomas

Opening a business bank account is one of those tasks that sounds like it should take an afternoon but can stretch into a week if you don't have the right documents ready. The good news: if you prepare upfront, the actual process takes about 15 minutes online or 30 minutes at a branch.

Here's exactly what you need, step by step.

Why You Need a Separate Business Bank Account

Before the how — the why, briefly:

Legal protection. If you're an LLC or corporation, mixing personal and business funds can pierce your liability protection. That defeats the entire purpose of forming a separate entity.
Tax simplicity. Come tax season, every transaction in your business account is a business transaction. No scrolling through Uber Eats charges to find the office supply purchase.
Professionalism. Clients writing checks to "John Smith" instead of "Smith Consulting LLC" looks amateur. Vendors and partners expect a business account.
Financial clarity. You can't manage what you can't see. A dedicated account gives you a clear picture of revenue, expenses, and cash flow.

Even sole proprietors without an LLC should use a separate account. It's not legally required, but it makes everything easier.

What You Need Before You Start

Gather these documents first. Missing even one will stall the process.

For All Business Types

Employer Identification Number (EIN). Your business's tax ID, issued by the IRS. Apply free at IRS.gov — you'll get it immediately online. Sole proprietors without employees can use their Social Security Number instead, but an EIN is better practice.
Government-issued photo ID. Driver's license, passport, or state ID for every person who will be an authorized signer on the account.
Business name and address. Your legal business name (as registered with your state) and physical business address. P.O. boxes typically aren't accepted as primary addresses.

For LLCs

Everything above, plus:

Articles of Organization. Filed with your state's Secretary of State when you formed the LLC. The version stamped or acknowledged by the state.
Operating Agreement. Not every state requires one, but most banks want to see it. It shows who the members are and who has authority to act on behalf of the LLC.
EIN Confirmation Letter (IRS Letter 147C or CP 575).

For Corporations

Everything above, plus:

Articles of Incorporation. Filed with your Secretary of State.
Corporate Bylaws. Governs how the corporation operates.
Board Resolution. A formal document authorizing the opening of a bank account and designating authorized signers. Some banks provide a template.
Certificate of Good Standing (some banks require this).

For Sole Proprietors

SSN or EIN. Either works, but an EIN keeps your SSN off business documents.
DBA Certificate (if applicable). If you operate under a name different from your legal name (e.g., "Jane Doe" doing business as "Doe Design Studio"), you need the DBA/fictitious business name filing from your county or state.
Business license (if your city/county requires one).

For Partnerships

Partnership Agreement. Shows who the partners are and their authority levels.
EIN. Partnerships must have one — you can't use a personal SSN.
All partners' IDs (or at minimum, the IDs of partners who will be signers).

Step-by-Step: Opening the Account

Step 1: Choose Your Bank

This is the most important decision, and it happens before you fill out any application. Key factors:

Fees: Monthly maintenance, transaction fees, wire fees, ATM fees. The best accounts in 2026 charge $0 across the board.
Interest rate: Your deposits should be earning money. The difference between 0.01% and 1.75% APY on $100K is over $1,700/year.
Accounting integration: Does the bank connect to your accounting software? Better yet — does it include accounting software built-in?
FDIC coverage: Standard is $250K. Some platforms offer extended coverage through sweep networks.
Online vs. branch: Do you need to deposit cash in person, or do you transact primarily online?

For a detailed comparison, see our guide to the best business bank accounts in 2026.

Step 2: Apply Online or In Person

Online (most modern platforms):

Go to the bank's website and click "Open Account" or similar
Enter your business information (legal name, EIN, address, business type, formation date)
Enter personal information for all authorized signers
Upload documents (Articles of Organization/Incorporation, EIN letter, IDs)
Verify your identity (usually instant with a photo ID scan)
Fund the account with an initial deposit (some require $0, others $25-$100)

Most online applications take 10-15 minutes. Approval is often instant or within one business day.

In person (traditional banks):

Call ahead to confirm required documents and schedule an appointment
Bring all documents listed above — originals, not copies
All authorized signers may need to be present
The banker will walk you through the application
Fund the account with an initial deposit

Branch appointments typically take 30-60 minutes.

Step 3: Fund the Account

Most banks require an initial deposit to activate the account. This ranges from $0 (many online platforms) to $100+ (traditional banks). Some business checking accounts require a minimum ongoing balance to avoid fees — check this before you commit.

Funding options:

ACH transfer from your personal account (1-3 business days)
Wire transfer (same day, but may incur a fee)
Check deposit (mobile or in-branch)
Cash deposit (in-branch only)

Step 4: Set Up Online Banking and Cards

Once approved:

Set up online and mobile banking access
Order business debit cards for authorized users
Enable transaction notifications (set alerts for large transactions and low balances)
Connect your accounting software to the bank feed (or use built-in accounting if your platform offers it)

Step 5: Start Using It

Update your invoicing to include new bank details
Set up direct deposit for payroll
Connect payment processors (Stripe, Square, PayPal)
Begin routing all business income and expenses through the new account

Common Mistakes to Avoid

Using your personal account "temporarily." Temporary becomes permanent. Open the business account on day one — even before you have revenue. It's free at most platforms and saves you from untangling commingled finances later.

Choosing a bank based on personal banking. Your personal bank isn't necessarily the best for your business. Evaluate business accounts on their own merits. Different priorities, different needs.

Not getting an EIN. Sole proprietors can technically use their SSN, but an EIN is free, takes 5 minutes to get, and keeps your Social Security Number off business paperwork. Just do it.

Skipping the operating agreement (LLCs). Even single-member LLCs should have an operating agreement. Banks ask for it, and it protects your liability shield. It can be a simple one-page document.

Opening the account without thinking about accounting. You'll need to categorize and reconcile every transaction in this account. If you choose a bank that includes accounting software, you skip an entire layer of setup and monthly busywork. If not, connect QuickBooks or Xero immediately — don't wait until tax season.

Not setting up alerts. Fraud happens. Set transaction alerts from day one so you know immediately if something looks wrong.

How Long Does It Take?

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The biggest delays come from missing documents. If you have everything ready, most platforms approve you the same day.

Frequently Asked Questions

Can I open a business bank account without an EIN?

Sole proprietors can use their Social Security Number at most banks. LLCs, corporations, and partnerships need an EIN. Getting one is free and instant at IRS.gov — there's no reason not to have one.

Can I open a business bank account online?

Yes. Most modern banking platforms allow fully online account opening with document upload and instant identity verification. Traditional banks may require at least one in-person visit.

How much money do I need to open a business bank account?

Many platforms require $0. Traditional banks typically require $25-$100 as an initial deposit. Some require a minimum ongoing balance ($1,500-$5,000) to avoid monthly fees — check this before you sign up.

Can I open a business bank account for a side hustle?

Yes, if you have a legal business structure (LLC, sole proprietorship with a DBA, etc.) and the required documents. A business bank account is appropriate for any business activity — there's no revenue minimum.

What if my business is brand new with no revenue?

No problem. Banks don't require revenue history to open a deposit account. You're simply opening an account and depositing money — there's nothing to underwrite. Lending products (loans, lines of credit) require financial history, but checking and savings accounts do not.

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*Ready to open your account? Get started with Holdings — free banking, free accounting software, and 1.75% APY on all balances. Takes about 10 minutes, no branch visit required.*