Requirements and Documents
To open a business bank account, you’ll need a personal ID and proof of address. You will need to present an EIN from the IRS before opening any business bank account. Your personal social security number may also be needed. Keeping bank accounts for your business separate from personal accounts is vital for financial organization.
Once you’ve decided on the type of account you need and found the best banks for small business, the next steps are simple:
- Determine your account needs.
- Prepare your information and documents.
- Apply for an account.
You must provide a valid ID such as a driver’s license to open your business account. The bank will ask for the signatures and identification of all persons authorized to access the account. You must have funds to make the minimum initial deposit required by the bank.
What documents do you need?
- Two forms of ID like a driver’s license
- Your EIN
- Proof of address
- Prior bank statements
- Financial records
- Tax returns
- An initial deposit
Types of Accounts and Banking Choices
Whether you are a sole trader or the owner of an incorporated business entity (i.e., C corp, LLC, nonprofit, etc.), it is important to have a distinct account to maintain financial clarity and for legal reasons. Most banks don’t charge fees when you first open your account and many allow businesses to open accounts online.
How do you choose the right bank?
- Know your business goals and banking needs.
- Carefully compare banks on rates, fees, and technology.
Credit unions also provide similar benefits for business members and can be a good resource for business credit.
Frequently Asked Questions about Business Banking
Minimum Opening Amount and Account Set-Up Time
What is the minimum amount to open a business account? Minimum deposits can be as low as $25 for a basic business bank account, and some banks offer no minimum deposits and no minimum balance.
How long does it take to open a business bank account? It typically takes 1 to 4 weeks for the bank to carry out necessary checks to confirm your identity and the legitimacy of your business.
Opening an Account without an LLC
Can you open an account without an LLC? Yes. While LLCs offer liability protections, they also entail more legal burdens. An LLC is not required just to open a bank account.
Regardless of your business structure, you should always choose an account that best fits your business’s size and needs, and compare banks to find one that meets your requirements in terms of rates, service, and technology.