do i need a business plan to open a business bank account

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What do you need to open a business bank account?

Discover what documents you need in order to open a new business bank account.  Presented by Chase for Business .

As a small business owner, it's important to keep your personal and business banking separate so you can monitor the profitability of your business and avoid mixing transactions. With a business bank account , you can help protect yourself and your business. Before opening one, be sure you understand what you need to start making deposits and getting the most from your account.

In this article, you’ll learn how to open a business bank account and why having one is crucial.

How do you open a business bank account?

Opening a business checking or business savings account can be simple and straightforward when you know what information you need to get started.

1. EIN number

The first thing you should have is an employer identification number — also called an EIN, FEIN or tax identification number. The IRS issues and manages your EIN. If you haven't filed for a tax ID number, you may still be able to open a business bank account with your personal Social Security number.

Depending on your type of business, you may not need to apply for an EIN. A sole proprietorship with no employees typically doesn’t require one. A business formed as a limited liability company (LLC) may need an EIN, depending on whether it has employees. If you’re still unsure whether your business needs an EIN, refer to this checklist from IRS.gov and seek professional advice.

2. Personal and business identification

Opening a business bank account requires proof of identification for both you and your business. Examples include your state-issued driver’s license or passport, your business license or your partnership agreements.

Your business also may need to provide additional materials.

Sole proprietor: You will need to present your Social Security number. If your business has a DBA (doing business as) or assumed names, you will need to provide other documents that show the other name or names.

LLC: You may need to present the EIN and business registration. If you are the sole owner, in most cases your name should be listed as such.

Limited liability partnership: You will need to provide an agreement that shows the names of all the partners as well as the name of the business.

Have your business’s paperwork ready when you go to open a business bank account. If you have filed documents or licenses on the state level, you might need to bring them as well. When speaking with a business banker, make sure to ask which documents the financial institution requires to open a business checking account.

3. Initial deposit

Once you’ve established your personal and business identities, you may need to make an initial business deposit to open your account. Initial deposits and minimum balances vary by bank and account type.

Select a business bank account with an initial deposit amount and minimum daily balance that are manageable for your business. Work with your local business banker to identify the amount of your initial deposit. Also, ask about any limited-time offers or deals; many banks waive initial deposits or contribute a monetary offer to qualifying new accounts.

The benefits of business bank accounts

Opening a business banking account for your company has many benefits, both personally and professionally.

Keeps finances separate: One advantage of opening a business bank account is separating your personal and business finances. Doing so can be important for taxes and it can help keep you from confusing business with personal expenses.

Helps maintain liability protection: If you operate an LLC or corporation, a business bank account might help you maintain liability protection. Having one could potentially secure you from payouts in situations where you may be found liable. Business owners should speak with an attorney to understand what protection is available (if any) and what steps to take.

Helps streamline the tax process: Having a business bank account with all of your inflows and outflows can help when you’re filing taxes. All of your business expenses will be in one place and you can use the account to pay all clients, customers and vendors. Business owners should speak with a tax professional for more information.

Establishes business credit: A business also needs to establish credit and setting up a bank account is one way to do this. If you plan to take out a loan or work with a supplier, having a business credit history can help. To establish a credit history and get access to capital, you may also consider applying for a business credit card.

The process of opening a bank account

Once you have all the documents you need, opening a business bank account can be straightforward. The documents discussed in this article are a great place to start, but requirements may vary by bank. Speak with a banker for more information.

When you’re ready to open your business bank account, you can open a business bank account online or stop at a branch near you . It might be helpful to meet with a business banker to determine what kind of account you need: business checking , business savings or a merchant service account .

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How to Open a Business Bank Account

Lisa Furgison

7 min. read

Updated May 11, 2024

One of the key items on your new business’s  startup checklist  is opening a business bank account. Wherever you decide to open an account, you’ll likely use that bank or credit union for years to come. It’s not just a place to hold your money; it’s a partner that you’ll want to develop a relationship with as your company grows, especially if you  seek a loan  or line of credit.

We’ve created this guide to help walk you through the process of setting up a business bank account. We’ll help you  find a bank that’s right for you , help you weigh banking features, and go over the setup process.

• 3 reasons you need a business bank account

If you’re just starting out, you might wonder why you need a business bank account. Why not just use your personal accounts? Any serious entrepreneur will tell you that a business account is vital to your success.

Why? Here are a few reasons.

1. To track your expenses

If you keep your personal and business accounts together, you’ll have to sift through each transaction to see how much money came in and went out.

It’s a tedious task that eats away at time that’s better spent improving your business. It’s a smart idea to start a business credit card for the same reason. It’s really hard to  monitor your company’s cash flow  if it’s mixed together with your personal money.

2. To alleviate tax headaches

When  tax time rolls around , you want to have all of your numbers in one place. It’s infinitely easier to turn over bank statements to an accountant that are solely based on your business.

From those statements, a skilled accountant can look for tax deductions and incentives. Even if you decide to do your own taxes, an account dedicated to your business will be a lifesaver.

3. To start a relationship with a bank

At some point, you might need a loan for your business. Hopefully, in a few years, you’ll look to expand.

If you already have a relationship with a bank, you’re one step closer to getting funding. This connection, combined with  a solid business plan , will help you secure the funds you need to grow.

• Considerations to help you pick the right bank

You have a variety of options to choose from. Should you go with a big corporate bank, a regional bank, or a credit union? It’s a tough decision. It all depends on what you’re looking for.

Here are a few points to consider.

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Every bank has fees, some more than others. Be sure to ask about fees and their structure.

In some cases, you’re charged for not keeping a minimum balance in your account. ATM fees can add up. Some banks even charge a “maintenance fee” just to keep the account open.

Typically, big banks can offer lower fees because they have a higher volume of clients. Ask how common it is for fees to increase too, or if any of the rates are promotional and expire quickly.

Lending ability

Inquire about lending ability. Can the banker you work with authorize  a small business loan , or does it have to go through sixteen layers of corporate executives first? It’s something you’ll want to know upfront.

Typically, regional banks and credit unions have more flexibility here.

Online features

Most entrepreneurs want online features. Most banks offer them.

From online bill pay to the ability to transfer money from your business account to your personal account, ask about specific features that you need and compare prices with other banks.

Customer satisfaction

In some cases, working with your local branch provides personal satisfaction, but according to a J.D. Power customer satisfaction  survey , big banks outrank their smaller counterparts in this area. It’s something you’ll have to weigh for yourself.

Online banks

There are a growing number of online banks, and some entrepreneurs find their features appealing. Online banks tend to offer optimized digital features, like banking apps and user-friendly dashboards.

Of course, there’s no face-to-face connection, which depending on your business could be a pro or con. It can also  be challenging to deposit cash , if your business has a brick and mortar location.

Finding the right bank is probably the most time-consuming part of the process. It will take some time to investigate what each bank has to offer and how it works within your business.

• What you should bring when opening an account

When you’re ready to open a business bank account, you’ll need to gather some paperwork to take with you. Here’s a quick list of what you should bring.

Employer identification number

Before setting up an account, you’ll need an  employer identification number, or EIN . The government uses this number to keep track of your business and its tax requirements.

You can apply online to get this number through the  IRS website . After filling out some forms online, you’ll get the number immediately.

Make sure you have your driver’s license with you. The bank will need a proper form of identification to prove you are who you say you are. If you have an official business partner, they will need to bring their ID also.

Certification of business identity

No matter what kind of business you establish, you’ll have to file paperwork with the state. The bank needs this information on  your business structure  too.

If you  set up an LLC , you’ll need articles of organization. If you set up a proprietorship, you’ll need your  DBA (doing business as ) papers. If you set up a corporation, you’ll need to bring your articles of incorporation. If you have a business partner, bring your  partnership agreement .

Business license (only required for certain businesses)

In some states, specific businesses need a  business license  to operate. When you establish your business with the state, you’ll be notified if you need a license. If it’s required by the state, the bank will need to see it to make sure your business is legitimate.

Bank application

Every bank is different, but there’s always an application to fill out. It’s a good idea to pick up the application and fill it out at home. That way, you’ll be ready to go as soon as you sit down with a banker.

• What to expect when you open an account

You’ll sit down with a banker and talk about your business needs. The banker will go over different account options with you and review your paperwork. If you haven’t filled out an application ahead of time, you’ll do that too.

You’ll fill out a signature card so the bank can check your signature against various transactions. If you have a business partner, he or she will need to sign a card as well to have access to the account.

The bank will check your  personal credit score . The bank wants to know who they’re dealing with, so expect them to take a look at your financial history. If you plan to ask for a line of credit or a loan, some of that decision will be based on your credit score.

The whole process will likely take an hour or so, maybe longer if you plan to discuss additional products like savings accounts,  business credit cards , or lines of credit.

You’ll be issued a temporary checkbook, and most banks issue a temporary ATM or debit card. Your official checkbook and debit card are mailed to you several days later.

• Maintaining your bank account

At least once a year, it’s a good idea to review your banking choice. Review the fees and make sure you’re not being charged for anything new. If you see anything out of the ordinary, call your bank to discuss the problem.

Lisa Furgison is a multimedia journalist with a passion for writing. She holds a graduate degree in mass communications and spent eight years as a television reporter before moving into the freelance world, where she focuses mainly on content creation and social media strategies. Furgison has crisscrossed the U.S. as a reporter, but now calls Key West, Florida home. When she's not conducting interviews or typing away on her laptop, she loves to travel.

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Home > Finance > Banking

How to Open a Business Bank Account

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Choosing to open a business bank account is kind of a big deal. It’s one of the best ways to legitimize your business, indicating that your business’s finances are separate from your personal finances because you’re a real small-business owner now.

But how do you go about opening that separate bank account?

In this guide, we’ll explain each step of getting banking services for your business. Whether you need a checking account or a savings account, the process ahead will help you get your money in the right place.

Let’s get banking!

• Figure out what kind of account(s) you need.
• Decide what features you want in your account.
• Choose the right bank for you.
• Gather your business documents.
• Open your business bank account.
• Use your new bank account!

1. Figure out what kind of account(s) you need

Okay, let’s start off with an easy task: choosing what kind of bank account your business needs. First, you need to decide between a checking account and a savings account.

If you’re like most small businesses, you probably want a checking account . You likely already know the basics about checking from having a personal account: it’s an account that lets you easily access your money. You can deposit checks, get paid, or make payments with your business checking account.

Business checking account vs. business savings account

But if you find yourself with extra cash on hand (lucky you), then you might also want a small-business savings account . These accounts have higher interest rates than checking accounts do, which means your spare cash can earn you more money just by sitting there. The catch? Your access to your savings account is often limited.

How so? Well, the Federal Reserve has historically placed a six-transaction limit on savings accounts. This meant people could only withdraw money six times per month.

While this rule is still technically in place, the Federal Reserve no longer enforces it as of April 2020. 1 As a result, banks are now free to allow customers an unlimited amount of withdrawals, although they are not required to do so .

If you're able to avoid touching your money for a while and you want to maximize your savings, you might opt for a CD (certificate of deposit) instead. In that case, you can’t access your funds at all until the end of a specified term, unless you want to pay a potentially hefty early withdrawal penalty.

Once you know what kind of business bank account you need , you can start narrowing down the field.

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2. Decide what features you want in your account

Look, there are a lot of banks out there that want your business’s banking business. The easiest ways to narrow them down is to figure out if there are any specific features you need from your business bank.

For example, if you don’t have a ton of cash on hand, you might want the checking account that has the smallest possible opening deposit. Or if you have highly variable cash flow, you might prefer an account that won’t charge you monthly fees for carrying a low balance

Or let’s say you depend on your accounting and payroll software to keep your money in order. You’ll probably want a bank account that’s compatible with that software. Otherwise, it’s back to manual money crunching for you.

Here are some other features you might consider:

Number of branch and ATM locations

• Mobile and online banking options
• Bill pay capabilities
• High interest rates (for savings accounts)
• Discounted ATM fees
• No minimum balance
• No transaction fees

You might also want to look for a bank that offers complementary services like these:

• Merchant account services
• Discounts on business loans and lines of credit
• Business credit cards
• A personal bank account

Go ahead and nail down your needs. Then move on to step three.

Starting at $0/month, Lili offers a checking account with time-saving tax optimization and accounting features specifically built for entrepreneurs.

3. Choose the right bank for you

With your list of needs and wants in hand, you can narrow down your choices and find the perfect bank for your business.

We recommend you use our rankings of the best banks for small business , where we help you easily compare your options. Some small-business owners also find that their local credit union has the best deals, so you can look into that as well.

But however you go about choosing, make sure you fully understand all the fees associated with your account. You don’t want surprise transaction fees blowing your budget, after all.

Compare the top online small-business banks

Data as of 2/23/23.  Offers and availability may vary by location and are subject to change. *Waivable with a balance of over $500

4. Gather all the documents you’ll need

Now that you know which bank you want to open an account with, you’re almost ready. But don’t march down to the bank just yet—make sure all your paperwork is in order first.

For most banks, you’ll need to have your employer identification number (EIN), your social security number (SSN), your business license, and your articles of organization (or any other business formation documents you have).

Some banks will require other documentation, so check what your bank of choice asks for before you apply.

If you don’t already have an EIN or articles of organization, now would be a good time to get those. Some banks are wary of unofficial businesses. So if you haven’t already filed all the paperwork to make your business legal and legitimate, go ahead and take care of that before you try to open a bank account.

5. Open your business bank account

Now that you know what kind of business bank account you want, which bank you want it from, and you’ve got your paperwork in order, you’re ready to apply for that account. With any luck, the bank will accept your application and bam! You’ve got yourself a new account.

Keep in mind that banks do sometimes reject applications for bank accounts. Usually, that rejection has to do with your past banking behavior. So if, for example, the bank looks you up on ChexSystems (kind of like a credit bureau, but for bank accounts instead of credit) and sees that you have a long history of bouncing checks or overdrafting your account, it might reject you.

But hopefully that won’t be a problem, and you’ll get that new business bank account without any trouble.

6. Use your new bank account!

Now you can get down to using and enjoying your business deposit account. Take care of business expenses. Pay people. Pay yourself! Deposit checks. Save money. Whatever it is you plan to do with that bank account, we hope you enjoy doing it.

And look, we don’t want to nag, but make sure you’re responsible with your business finances. If you prove to be a good business banking customer, you might find yourself eligible for more perks or opportunities through your bank. So take care of those bookkeeping basics .

The takeaway

As you can see from the six easy steps above, opening a bank account is a relatively simple process once you know what you want. So what are you waiting for? Figure out your needs, go ahead and apply for your new bank account—and then use it to take care of business.

Interested specifically in a small-business checking account? Take a look at our list of the best business checking accounts .

Related reading

• Online Banking vs. In-Person Banking—Which Is Better for Your Biz?
• ChexSystems for Business Accounts: How It Affects Your Business Banking
• How to Apply for a Business Loan Online
• US Bank Small-Business Banking Review: Plenty of Options for Scaling Businesses

FAQs about opening a business bank account

Nope. Pretty much all banks require your social security number too.

Probably. Most banks have some kind of minimum deposit amount, but you’ll have to check with your bank of choice to find out its minimum. Some online-only banks let you open a business bank account without a deposit, but most traditional banks don’t.

But take heart; most minimum deposit fees range from $25 to $100. Pretty doable, right?

Need one? Not necessarily. Should have one? Probably. We explain in more detail in our article on whether you should get a business bank account .

At Business.org, our research is meant to offer general product and service recommendations. We don't guarantee that our suggestions will work best for each individual or business, so consider your unique needs when choosing products and services.

• Board of Governors of the Federal Reserve System. " CA 21-6: Suspension of Regulation D Examination Procedures ." March 29, 2021. Accessed February 23, 2023.

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How do I open a business bank account?

January 29, 2024 | 4 minute read

Answered by Christian Bohmfalk Small Business Deposits Executive Bank of America

If you’ve started a new business, one of the most important steps you can take to keep your personal and business finances separate is to open a business bank account.

As a new business owner, you may not know what to expect when you open a business bank account. You can usually apply for a business bank account fairly quickly by filling out the required forms and providing the documentation the bank requires. Knowing the information and documents required in advance can streamline the process of getting it set up.

To learn more about the steps to launch a new business, including how to form your business with an exclusive offer from Incfile, visit The Bank of America Start a Business Center .

What do I need to open a business bank account?

Business bank accounts can generally be opened fully digitally online or through a mobile device. Alternatively, business owners can visit a branch or call to start an account.

You may need some or all of the following, depending on how you have formed your business’s legal structure:

• The address and phone number of your company
• The name(s) of the people who will be listed as account owners
• Personal identification such as your driver’s license
• A federal tax ID number for the business, also known as an employer identification number
• Your Social Security number if you are a sole proprietor
• State or local authority documents that show you’ve formed a legal entity, such as a limited liability company (LLC)
• The bank’s minimum deposit amount. Unfunded accounts may be forced to close.

To address other questions you may have about opening a business bank account, see our Frequently Asked Questions .

Why open a business bank account?

It makes it easier to track your business’s inflows and outflows so you have a bottom-line accounting of revenue and expenses. It can be very challenging to do your taxes accurately at year-end if you have commingled your personal or family finances with those of your business.

Business bank accounts make it easier for you to give another person — like a business partner or bookkeeper — access to your transactions. And business bank accounts come with many tools not available on consumer accounts that make it easier for you to run your business.

Establishing a business bank account can also help you build your business’s credit profile .

What types of business bank accounts are there?

Three types of business accounts will help you operate your business.

• A business checking account allows you to accept deposits and make payments and serves as the core operating account for your business. A business checking account will also enable access to the many digital tools and capabilities your bank provides. Not all banks use the word “checking” to describe these business operating accounts.
• A merchant services account enables you to accept credit and debit card payments from your customers. It can be connected to your checking account.
• A business savings account or business CD account allows you to put money aside for taxes or big purchases. These accounts pay interest on the balance.

What is there to consider when picking a type of business bank account?

Here are some things to look at:

• Fees and minimum balances . Ask how much you will pay. Remember banks might waive fees if you keep a minimum balance or use your business debit card a certain amount.
• Cost of merchant services . This is the cost of accepting credit or debit cards, so estimate your monthly costs based on the size and frequency of your credit and debit card transactions with customers.
• Digital tools . Look for an account that provides access to business-specific digital capabilities such as cash flow tools, integration with accounting platforms and payment and invoicing abilities.
• Customer service . How easy is it to get help? Can you meet with someone in person if you need to?
• Perks or rewards . Many accounts and affiliated credit cards have point programs or membership programs that will provide incremental benefits based on your relationship and account balances.
• ATM access . Do you need to withdraw cash or to make deposits through an ATM?
• Branch access . If you need to visit a branch and speak with a specialist, how easy and convenient will this be? Many owners find that it is worthwhile to stop in regularly and build a strong working relationship with their bankers , who can be a source of valuable insight as a business grows.

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Opening a business bank account: what you need.

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One of the biggest challenges of running a business is managing cash flow and keeping track of spending. A dedicated business bank account can make that easier to do and it can save you some trouble at tax time if you need to track deductible expenses.

What do you need to open a business bank account? And how do you decide where to open a bank account for your business?

Knowing what to expect can save some time when you're ready to get your account up and running.

Found is banking built for the self-employed

Requirements to open a business bank account.

Banks and credit unions can set the guidelines for what you'll need to open a business bank account. If you've already chosen a bank, it should be able to tell you exactly what you'll need in terms of documentation.

Typically, banks expect you to provide certain details about yourself and the business. You'll also need to meet the minimum opening deposit requirement if there is one.

Here's a more detailed list of what is usually required for opening a business bank account:

Employer Identification Number (EIN)

The first thing you might need to open a business bank account is an Employer Identification Number (EIN) or Federal Tax Identification Number (FTIN). These numbers, issued by the IRS, are used to identify business entities for tax purposes.

You can apply for an EIN or FTIN online through the IRS website . It's free to apply and your EIN can be issued instantly.

Whether you need an EIN or not depends on your business type. Sole proprietors, for example, generally don't need them if they don't have employees. In that case, you could apply for a business bank account with your Social Security number instead.

Business identification

Banks usually need certain paperwork that shows your business exists legally. The list of documents that a bank may ask for can include:

• Business-formation documents.
• An ownership agreement.
• A copy of your business license.

Should you operate under a “Doing Business As” name, you'll also need to share that with your bank.

If you haven't yet filled out the necessary paperwork to register your business, you may need to backtrack a little before you can open a business bank account. Your state's Secretary of State office or revenue agency should be able to offer guidance on how to register your business where you live.

Personal identification

You'll also need to prove to the bank that you are who you say you are to open a new business account. Banks usually expect you to have a government-issued ID, which can include:

• A driver's license.
• State ID card.

Again, if you're setting up a business bank account as a sole proprietor you'll also need to share your Social Security number.

Opening deposit

It's not uncommon for banks to require a minimum opening deposit for new business accounts. The amount you'll need to have can depend on the bank.

You could make your minimum deposit via ACH transfer if you're opening a business bank account online. If you're opening your account in person at a branch, you could deposit a check or cash instead.

How to open a business bank account

Opening a business bank account isn't that different from opening a personal bank account. The main distinction lies in the type of information you'll need to provide to the bank.

Here's how the process typically works:

• Choose a business bank account to open.
• Complete the application for a new business account.
• Provide any supporting documentation the bank needs.
• Link an external bank account and make your initial deposit.

Opening a business bank account online can save time since you don't have to visit a branch. You can easily transfer money from your current bank to fund your new account. You'll just need the bank account number and routing number for the financial institution that the money is coming from.

Best business bank accounts

There are plenty of business bank accounts to choose from, including ones offered by brick-and-mortar banks, online banks, and credit unions. You might also consider using a business banking app if you're looking for an alternative to traditional banking options.

Here are three of the best business bank accounts, based on the features offered and the fees you'll pay.

Lili is a fintech platform that provides business banking services through Choice Financial Group, a Federal Deposit Insurance Corporation (FDIC)-member bank. Lili users can get a business checking account, bookkeeping tools, and tax-planning tools all in one place. Some of the features that make Lili unique include:

• No overdraft fees or hidden fees.
• No deposit or minimum-balance requirements.
• Invoicing software.
• Smart bookkeeping and tax-report generation.
• Tools and resources to help you grow your business.

You can add a business savings account to your checking account and Lili pays a competitive annual percentage yield (APY) on balances. There's also the option to upgrade to Lili Premium to receive priority customer support when you need it.

Revolut is another fintech platform that offers business banking services. It's designed for businesses that operate internationally. You can transfer money securely across borders and access funds in more than 25 currencies. Revolut also makes it easier to accept payments from different countries.

You might appreciate the team spending feature that's included with Revolut debit cards if you have one or more employees. This feature allows you to set spending permissions and limits while tracking expenses for each linked card in one place.

Revolut's basic plans for companies and freelancers are free. If you need more features or tools, you can upgrade to a paid plan.

If you prefer to keep accounts at a traditional bank, U.S. Bank has several small business checking options to choose from. There are accounts for:

• New and smaller businesses.
• Mid-sized businesses.
• Larger businesses that maintain higher balances.

U.S. Bank also offers specialty accounts for nonprofits and for businesses that are looking for premium features and support. All of the bank's business accounts carry a monthly maintenance fee, but there are numerous ways to waive them.

You can manage your accounts online or through the U.S. Bank mobile app. You also have the convenience of visiting a U.S. Bank branch or ATM near you.

Factors to consider when opening a business bank account

It's important to take your time and compare business bank accounts to find the right one for your needs. Here are some of the questions you might consider when shopping around for business banking options.

• What is the minimum opening deposit and are there ongoing minimum balance requirements?
• Are there daily, weekly, or monthly limits on deposit and withdrawal transactions?
• What are the fees associated with the account?
• Does the bank offer multiple business bank accounts, including checking, savings, and money market options?
• Is branch banking access necessary, based on the type of business you run?
• Does the bank offer a robust mobile app and user-friendly online banking?
• Is there dedicated business account support and if so, when is help available?

It's also a good idea to consider which features or benefits would be most useful to have, based on the type of business you run.

If you have employees, for example, you might prefer to keep your accounts at a bank that offers payroll services. Or you might lean toward a bank that specializes in addressing the unique needs of certain industries or business types.

TIME Stamp: Opening a business bank account doesn't have to be complicated

Starting a business can be exciting and a little stressful since there may be a lot to do before you officially start operating. Opening a business bank account is an important step so that you can begin receiving payments and paying expenses. While it might feel a little intimidating, it's not that difficult to do once you know what's required.

Frequently asked questions (FAQs)

What are the different types of business accounts.

Business accounts can include checking accounts, savings accounts, and money market accounts . Banks can also offer specialty accounts and services to businesses, such as merchant accounts and credit card accounts. The common thread is that these accounts are specifically designed to meet the needs of business owners.

Why can't I open a business bank account?

If you've tried to open a business bank account and been denied, it may be because you're lacking the necessary documentation or information that the bank requires. Banks may also deny you a business account if the bank views your venture as being too risky or doesn't work with the industry that you operate in.

Do you need a bank to start a business?

You don't need a separate bank account to start a business, but it's a good idea to have one for a few reasons. For one thing, a separate business bank account can make it easier to track expenses and simplify reporting at tax time. For another, a business bank account can provide some liability protection that a personal bank account does not.

A business bank account could also make it easier to get approved for small business loans or credit cards. Lenders may ask to see financial records like cash flow statements or profit and low statements, which are easier to generate when you're keeping track of expenses in a separate account.

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Should you open a business bank account?

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Choosing the right bank

Required documentation.

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Maintaining your account

How to open a business bank account.

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• Business banking can be a great step if you want to separate your business and personal finances.
• You'll need a business license and business documentation to open a business bank account.
• You can use a Social Security Number as identification if you're a sole proprietor.

If you've started your own business, you may be ready to open a business bank account.

The U.S. Small Business Administration recommends opening a business bank account once you're ready to spend money or begin collecting income. Having a business bank account will give you the chance to manage your finances more professionally. 

Whether you're a freelancer, small business owner, or full-scale corporation executive, a business bank account is an important stepping stone to becoming a fully-fledged business.

Ultimately, business bank accounts help separate personal finances from your business finances. When you file taxes for your business, you'll need to have a clear idea of your operations throughout the year. A business bank account is an ideal place for documenting income and expenses.

When you're managing daily operations, you want to be able to conduct your business professionally. Once you've developed a formal business plan and received the necessary certificates and licenses for your business, opening a business bank account will be the next step.

Determining the right type of account

Business banking has similar account options to personal banking. These are the most common business bank accounts available at most banks: 

• Business checking account : You can manage everyday business operations with a business checking account. 
• Business savings account : Business savings accounts let you save money while earning interest.
• Business money market account: Business money market accounts may provide easier access to your money than a traditional savings account , while still allowing you to earn interest. You might have access to your account through a free debit card or a higher number of monthly withdrawals. 
• Business CD: Business certificates of deposit lock in your deposit at a certain rate for a specific amount of time. This can be helpful if you want to set money aside for a large purchase of equipment or inventory in the future. You'll want to be mindful of early withdrawal penalties , though. 
• Merchant services account: Merchant service accounts are ideal for managing debit or credit card transactions. 

You'll want to choose business banking options that best fit your goals. Pay attention to interest rates, minimum opening deposits, balance requirements, monthly bank maintenance fees, and transaction fees. These details can vary between bank accounts and financial institutions. 

As a business owner, your financial needs are likely to evolve. Consider what other financial products banks offer that you may need to use in the future, such as business loans or lines of credit. Find out whether the bank has business advisors or loan experts who have expertise in your industry. 

Personal documentation

All owners of the business must come together to open an account and bring personal documentation for business banking.

Like with a personal bank account, you'll need to provide government-issued ID, such as a driver's license or passport.

Business license

Depending on where you live and the type of business you own, federal and state business licenses and permits will be mandatory to establish your business.

When you open a business account, make sure to bring any business licenses you have. These indicate that you are following state and federal laws. 

Employer Identification Number (EIN) or Social Security Number (SSN)

An EIN is necessary for any business that is considered a partnership or corporation.

You'll need an EIN to open a business account if you aren't the only person in charge of your business. Sole proprietors can use their SSN instead of an EIN on a banking application or a business credit card application . 

If you currently don't have an EIN and aren't the sole owner of your business, you can apply for one using the IRS website. You can get your EIN the same day you fill out the application online.

Additional business documentation

Every business owner needs to provide basic business information to open a bank account, including the business name and address.

You may also need additional business documentation to open an account depending on your type of business and where you bank.

If you're part of a partnership, you may be asked to provide a partnership agreement or certificate of the limited partnership. If there isn't a formal partnership agreement, you'll have to make a written document that states a formal partnership hasn't been formed.

Business owners of a limited liability company or corporation may need additional documents that outline their business agreements and operations, like an LLC operating agreement or corporate bylaws.

The application process

Application processes vary by bank and account type. Applying online may be easier if you're the sole business owner, but be prepared to provide additional documents. 

If there are multiple owners who will need access to the new account, it may be easier to visit a bank branch and work with a bank representative in person. This will also give you the opportunity to ask questions as you go and start to build a relationship.

Download the bank's app as soon as your account is set up so that you can monitor your balance, deposits, and transactions on the go. Consider setting up alerts to stay on top of your balance requirement.

Business banking FAQs

Separate bank accounts can help when it comes to tax reporting and filing and boost the credibility of your business.

An Employer Identification Number (EIN) is a federal tax number that identifies your business to the IRS. Most banks require one to open a business account.

Yes, many banks have online applications for deposit accounts, including business accounts. 

Consider fees, the interest rate , accessibility online and in person, and online banking services and features.

Initial deposit requirements vary by bank, from $0 to $100. There may be separate daily minimum balance requirements for avoiding common bank fees or earning interest.

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If you’re starting a business, you’re going to need more than business cards for prospective customers to take you seriously. That’s where a business checking account comes in. Opening a business checking account is an essential step on your path to success. It will help you manage your cash flow and build a valuable relationship with a bank that may eventually help your business access credit for growth.

“Setting up a business checking account ultimately helps clearly separate your business and personal funds, provides more protection to your personal assets and makes it easier to keep track of your business expenses throughout the year for tax purposes,” says Tony Pica, senior vice president at Capital One.

What do I need to open a business checking account?

Opening a business checking account isn’t as simple as opening a personal checking account. You’ll need to have proper documentation, which will vary based on the type of your business.

“The documentation required to open a business account may depend on the structure of your business,” Pica says. “For example, a sole proprietor needs their federal tax ID number (TIN) letter and business license or fictitious name certificate, while an LLC or corporation also needs beneficial owner information and certificate of good standing.”

Your documentation requirements may vary based on where your business is located, too.

“Every state has its own set of rules for each structure [of a business], so talk with your trusted advisors, such as a business lawyer or accountant, to ensure you’ve compiled all of the necessary personal and company information,” Pica says. “This is a key step to make the process go as smoothly as possible.”

Here’s a rundown of the most common materials needed to open a business checking account:

• Two forms of identification
• Your tax ID number (TIN)
• Business documentation (Certificate of Good Standing)
• Assumed name certificate
• Beneficial owner information
• A solid understanding of your business plan

1. Two forms of identification

You’ll want to bring a government-issued ID – your state driver’s license or your passport will do – plus another piece of ID such as a credit card bill or a utility bill with your name listed on it.

2. Your tax ID number

Your business isn’t official until it’s registered to pay its fair share to the government. Make sure you have applied for your federal tax ID number, which is also known as your employee ID number (EIN), with the IRS.

3. Business identification documents

In addition to dealing with the federal government, you’ll need to get in touch with officials in the state where your business is headquartered to verify the legal existence of your business. That will likely entail registering your business with state and local governments to acquire a business registration certificate and applicable licenses.

If your business is a corporation or an LLC, you’ll likely need a Certificate of Good Standing. This shows that you’ve paid all the necessary fees and checked all the boxes, and it is typically secured through a Secretary of State’s office or a state’s Division of Corporations. The bank may also ask for meeting minutes, by-laws or other articles of incorporation.

4. Assumed name certificate

This item typically applies to sole proprietors and limited partnerships. Let’s say your name is Tim Ryan, but you are planning to operate as “Tim Ryan Painting.” That’s your assumed name, which might also be referred to as DBA (doing business as), a fictitious name or a trade name certificate. This typically applies to sole proprietors. You will likely be able to obtain this through your county clerk’s office.

5. Beneficial owner information

Banks are required to know who has an ownership stake of 25 percent or more in your company, which is the magic number that makes you a “beneficial owner.” If you own the business with someone else, you’ll need to determine how much equity each of you has in the company. Your bank will likely have you complete a simple form.

Like personal checking accounts, many business checking accounts require a minimum deposit to open. That amount will vary by bank. At Wells Fargo , for example, you only need $25 to open a business account, while U.S. Bank requires a minimum deposit of $100.

7. A solid understanding of your business plan

Be prepared to share a detailed overview of the nature of your business, expectations of your annual sales, where your suppliers and vendors are located and other information to establish your business’s credibility.

Choosing the best business checking account for your needs

Business checking accounts share one key thing in common with personal checking accounts: There are a lot of options. To find the best business checking account , think about what kinds of services you need. Will you want to send branded invoices? Do you plan to give other leaders of the company the ability to sign checks? Are you hoping to connect your account with software like Quickbooks or NetSuite? Will you need to visit a physical branch to make deposits, or could your business function easily without in-person interaction with a teller?

There are a number of business checking accounts for new businesses that offer low or no fees for owners in the early stages. Those accounts just include the basics: a place to park your money, a debit card and not much else. To take advantage of an account with expanded features while avoiding fees, though, you may need an accurate forecast of how much money you’ll be earning and spending on a regular basis.

For example, consider Bank of America’s two business checking options: Fundamentals vs. Relationship. To avoid the $16 monthly fee on the Fundamentals account, you need to spend $250 each month on a business debit or credit card and maintain a monthly balance of $5,000. The Relationship account offers bigger benefits such as no-fee stop payments, no-fee incoming wire transfers and the ability to customize access for employees, but it comes with a higher $29.95 monthly fee. Avoiding that extra cost carries a much taller order than the Fundamentals threshold: a monthly balance of $15,000.

Some other big banks such as Capital One have a similar model: lower-priced business checking accounts in exchange for fewer features.

“Before you open a business checking account, do your research,” Pica says. “Shop around and see what kind of offerings are available in the market for small businesses. Consider fees, interest, transaction limits, cash deposit limits, account maintenance requirements and access to digital business banking tools.”

— Bankrate’s René Bennett contributed to an update of this story.

Related Articles

Best business checking accounts for June 2024

How to open a savings account: 6 steps to take

How to open a money market account: 5 steps to take

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Do I Need a Business Bank Account

Published June 18, 2024

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Most businesses should open a business checking account at formation or upon earning consistent revenue from a hobby. This allows you to keep accurate records right away. It’s also a way to establish a credible business presence.

You don’t need to earn any revenue to qualify for an account. You only need to provide the corresponding documentation, such as your Social Security number, employer identification number (EIN), and business license, to verify your identity and ownership status. The precise requirements differ by bank and entity type.

In fact, a Square study finds that 63% of small business owners opened at least one business bank account when starting their business. Speaking from personal experience, it’s usually easier to set up your business accounts before accepting your first payment, as switching banking details on various platforms is a hassle.

How Do Business Bank Accounts Work?

Business bank accounts are specifically for conducting business-related transactions. They usually offer business-specific tools like employee controls, business software integrations, invoicing, and tax planning. 

However, they also have many features that are also offered on personal accounts, such as debit cards, online bill pay, direct deposit, and FDIC insurance. 

There are two primary types of business banking accounts:

• Business checking accounts : These accounts are specifically for daily transactions like receiving revenue and paying bills or employees.
• Business savings accounts : These accounts are to keep cash reserves in an interest-bearing account for long-term savings goals or to build an emergency buffer.

You may also open a merchant account through your bank to accept credit and debit payments instead of using a digital wallet like Square, Stripe, PayPal, or Venmo .

In addition to comparing features, account fees, and ease of access, you may also strive to earn business bank account promotions for a one-time cash bonus after completing specified activities.  

✨ Related: How to Open a Business Checking Account

Business Bank Account Advantages

The most compelling reasons to get a business bank account include:

Accurate bookkeeping: You can easily separate your business and personal transactions, which makes it easier to calculate your business revenue and tax-deductible expenses. Separating your finances makes tax return prep easier and provides more financial transparency for LLCs and multi-owner partnerships.

Asset protection: If you’re an LLC or a corporation, having a dedicated business bank account is essential to avoid “piercing the corporate veil.” Mixing your personal and business assets forfeits the legal protection of your personal assets.

Build a business identity: A business checking account is one of the first steps to starting a business . You can pay for expenses with a debit card and checks with your business name and banking details. Business loan lenders also require linking a business bank account to confirm your cash flow and operational history.

Start a banking relationship: You can also start a banking relationship that makes it easier to qualify for business credit cards or loans. This account can also help you get a business credit score through vendor payments reporting to the business credit bureaus. 

Business software integrations: Banks may offer unique features and software integrations for business accounts that personal accounts don’t need. These can make bookkeeping easier and allow you to monitor transactions if multiple employees have account access.  

Fictitious name: A business account can receive payments under a fictitious name when you’re “doing business as” (DBA).

Have employees: A dedicated business bank account makes running payroll easier, as you can use your EIN for tax-reporting purposes. A separate payroll account ensures your workers get paid, and you can precisely track this expense.  

Your bank may require business accounts: If you’re currently using a personal checking account, be sure to read the account agreement to avoid overstepping the boundaries. Your bank may require a business account to conduct a high volume of transactions and certain transaction types. 

Can I Use My Personal Bank Account for Business?

A personal checking account is suitable for money-making hobbies , especially if you’re a sole proprietor or independent contractor with minimal revenue or business-related tax deductions. I still recommend using an expense-tracking app or keeping an expense journal to track your monthly business income and spending for stressless tax prep.  

In short, you won’t benefit significantly from a business bank account, and the convenience of receiving your paycheck in the same account you use to pay living expenses, invest, and save for the future is more valuable. 

Some money-making ideas that only need a personal account include:

• Caregivers and babysitters
• Delivery app jobs
• Online freelancers (i.e., Fiverr, Upwork, Rev)
• Pet sitters
• Weekend side hustles

Many self-employed and part-time freelancers prefer sticking with personal checking accounts for instant access to direct deposits. This avoids the unnecessary step of paying yourself by transferring take-home pay from the business account to a personal account. If you do this, make sure you are saving money for your quarterly taxes .

Can I Use My Business Bank Account for Personal Use?

Business bank accounts should only be used for work-related expenses to avoid account agreement breaches and to maintain accurate recordkeeping. Personal use can void personal liability protection, which is the primary advantage of becoming an LLC . 

Additionally, the bank may close business accounts when it detects excessive personal activity. Similar policies apply to business credit cards.

While it’s an extra step, remain disciplined to transfer funds to your personal accounts when you need to spend money or fund savings goals.   

Should I Open a Separate Bank Account for My Business?

LLCs and corporations should open a business bank account upon founding. Most sole proprietors can also benefit from a business checking account to distinguish business assets from personal funds. 

Whether or not to open an account differs for independent contractors and online-based freelancers in a low-risk industry or with minimal expenses. The extra administrative burden and potential costs of maintaining business bank accounts are usually not worth it. 

For instance, it’s common to make money as a freelancer and receive payment in a personal account for the entire career and pay for periodic expenses with a personal credit card. You still receive year-end tax 1099 tax forms to prepare your income tax returns, but it’s wise to keep an itemized list notating your business expenses, such as processing fees, office supplies, and software subscriptions. 

Additionally, business checking accounts can be more likely to charge monthly fees that are challenging to waive if you have a low account balance or don’t conduct many transactions. In this situation, a free checking account can serve your purpose.

What Are the Best Business Bank Accounts?

The best business bank account depends on your monthly transaction volume, industry, and your average ongoing account balance, as service fees and complimentary items vary widely. You must also decide if you want local branch access to make cash deposits or if you prefer a bank for digital nomads . 

Below are some small business bank accounts to consider first for nationwide access and free banking options.

Axos Bank can be an all-in-one platform with premium and free business checking and savings options. Its Basic Business Checking has no monthly fees, minimum balance requirements, free incoming domestic wire transfers, and unlimited domestic ATM fee reimbursements.

Regarding income-producing cash reserves, its Business Premium Savings account can earn a competitive deposit interest rate. There are no minimum deposit or ongoing balance requirements. 

Read our Axos Bank review to learn more about its personal and business banking products.

Visit Axos Bank

Novo provides a free business checking account with unlimited transactions, check payments, and automatic categorization. Another perk lets you automatically set aside a percentage of each deposit into designated savings goals. 

Its complimentary Novo Boost feature allows you to access your Stripe payments up to 95% sooner. The banking app also offers invoicing and payroll capabilities and can easily integrate with business software.

Read our Novo Business Checking Review for more.

Lili Banking

Lili offers a free banking account that’s a good fit for freelancers and startups. Paid account plans provide interest-bearing accounts, expense management tools, accounting software, and more.

Upgrading to a paid membership can also provide priority customer support and a rewards debit card. Its four monthly plans cost from $0 to $55. 

Read our Lili review for more. 

Visit Lili Banking

Business checking accounts are advised for most businesses — especially LLCs and corporations — for tax planning advantages and personal liability protection. Keeping your personal and business transactions separate lets you accurately identify your revenue and expenses. It can also make a tax audit less stressful as you can easily prove what’s business-related and what’s a personal transaction.  You may decide to open one or multiple business accounts. The ideal number depends on the complexity of your finances. You may prefer to have dedicated accounts for separate expense categories like payroll, inventory purchases, and estimated taxes. 

Personal checking accounts are acceptable for some sole proprietors and independent contractors with relatively few expenses as tax prep remains easy. However, you won’t benefit from the personal liability protection available to LLCs. Further, you can pay for most small business expenses with a personal debit card or rewards credit card , although it becomes easier to overlook deductible transactions. 

Sole proprietors can open business banking accounts only with a Social Security number (SSN), although LLCs and corporations must apply with an EIN. However, some financial institutions may require each applicant to have an EIN. The documentation requirements differ slightly by bank or credit union.

Final Thoughts

Most organizations need a business bank account for daily transactions and accurate tax preparation. It also builds credibility and helps create a business history to qualify for more lucrative financial opportunities. With that said, not every sole proprietor or independent contractor benefits from a business account and is just fine sticking with the simplicity of a personal bank account.    

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About Josh Patoka

After graduating in $50k with student loans in May 2008 from Virginia Military Institute with a B.A. International Studies and Political Science with a minor in Spanish (he studied abroad in Sevilla, Spain for 3 months), Josh decided to sell his soul for seven years by working in the transportation industry to get out of debt ASAP and focus on doing something else with a better work-life balance.

He is a father of three and has been writing about (almost) everything personal finance since 2015. You can also find him at his own blog Money Buffalo where he shares his personal experience of becoming debt-free (twice) and taking a 50%+ pay cut when he changed careers.

Today, Josh relishes the flexibility of being self-employed and debt-free and encourages others to pursue their dreams. Josh enjoys spending his free time reading books and spending time with his wife and three children.

Opinions expressed here are the author's alone, not those of any bank or financial institution. This content has not been reviewed, approved or otherwise endorsed by any of these entities.

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Business Bank Account Checklist: Documents You’ll Need

Find out which documents and licenses you'll need to bring with you when you apply for a business bank account.

Table of Contents

Business bank accounts help you professionally manage your business finances and separate those funds from your personal finances. Opening a business bank account requires more effort than opening a personal account. There are documents to gather, names to be determined and licenses to get in order. Learn why you should have a business bank account and what you need to do to open one.

Benefits of a business bank account

Establishing a separate business bank account is an essential step in running your small business. While you may only have one personal bank account, your business likely needs multiple accounts.

According to the  U.S. Small Business Administration,  most business bank accounts offer benefits and perks that personal bank accounts do not. Here are four reasons why you need a business bank account.

1. Limited liability protection

Business banking helps  limit your personal liability  by keeping business funds separate from your personal funds.

“No matter what type of business you own, you should always separate your personal and business finances,” said Chas Rampenthal, general counsel at LegalZoom. “The first and most important step toward successfully separating your finances is to have separate bank accounts.”

2. Purchase protection for customers

Many banks offer merchant accounts as a business banking option, which provides purchase protection for your customers and also protects their personal information. You can also look for this feature in the best credit card processing services, as it can significantly boost customer satisfaction and reinforce trust in your brand.

3. Professionalism

A business bank account allows checks to be made to the business – which is more professional than asking customers to make checks to your name. Your customers can also pay with credit cards, and employees can handle banking tasks on behalf of the business.

4. Credit options

Some banks provide an option for a line of credit that you can use in an emergency. Many also offer business credit cards that you can use to start building a credit history for your fledgling business.

4 types of business bank accounts to consider

As with personal banking, there are several types of business bank accounts. Depending on your needs, you’ll likely need to open more than one account.

Here are the four common types of business bank accounts:

• Checking account: A business checking account is a great choice for managing payroll, expenses and other basic financial tasks that keep your business running.
• Savings account: In addition to a checking account, you’ll likely need a business savings account to hold your earnings.
• Merchant account: If you plan to  accept credit and debit card payments , check with your bank to see if you can set up a merchant account. “Depending on whom you bank with, some banks offer merchant services as well,” said Julia Spahiu, founder and CFO of Edi and Sienna Group. “I suggest to all my clients [that they] shop around before settling for one particular account, and renegotiate your rate at least once a year.”
• Credit card account: You can use a  business credit card  for emergencies or miscellaneous items for your business. The chief benefit of a credit card for the owners of startups or if one has bad credit is that it can help build or improve your business credit score.

Things to consider when choosing a bank for your business account

Business owners have many banking options, and every bank offers something a little different. Take your time perusing the various options until you find the right bank for your business.

“Always shop around,” said Mike Swigunski, founder and CEO of Global Career. “Banks are as keen to gain new customers as they are to retain current ones, so use this to your advantage to get better deals.”

Here’s what to consider (and ask about) as you evaluate different banks:

Every bank has different fee structures and features. Business accounts typically have higher fees and minimum balance requirements than personal accounts.

Sign-up bonuses

Tracy Odell, vice president of content at FinanceBuzz, recommends asking whether the bank offers any bonuses.

“Sometimes banks offer bonuses for opening a business account with them,” she said. “For example, a bank might offer $300 if you open an account and maintain a certain minimum balance. These offers can be a great way to earn a little extra revenue, but remember that these bonuses are taxable. Don’t be surprised if you get a 1099 for the bonus next tax season.”

Account maintenance requirements

Business bank accounts often have requirements you must meet; if you don’t, you can be charged fees. For instance, it’s common for banks to require you to maintain a certain balance – but this minimum amount varies from bank to bank – and it may be a daily or monthly minimum. If you have multiple accounts, the bank may count all of your accounts toward a combined minimum amount, or they may look at each account separately.

In lieu of maintaining a certain minimum balance, some banks, with their business checking accounts, won’t charge you the fee if you spend a certain minimum on a debit or credit card tied to your account, or if you use one of the bank’s other services.

Carefully consider which account features are must-haves when you’re comparing banks. For instance, do you need a business bank account that includes detailed analytics? Do you want a mobile app that allows you to deposit checks digitally? Do you need a business debit card? Would it be useful to receive alerts when your balance is nearing your minimum?

How to open a business bank account by company type

According to Grant Aldrich, founder and CEO of OnlineDegree.com,  opening a business bank account  follows the same process regardless of your business type, except for sole proprietorships, as opening a personal savings or checking account.

“If you’re a sole proprietor, you need to bring your Social Security card instead of your EIN,” Aldrich said.

Sole proprietors still need to bring their business license, DBA certificate and personal identification documents.

What documentation do you need to open a business bank account?

Before you open a business bank account, you should have the following documentation prepared:

Articles of incorporation

Business licenses, doing business as (dba) certificate, employer identification number (ein), identification documents.

“There are various factors business owners should consider when opening a business bank account,” said Rampenthal. “It’s essential to prepare all necessary documents from the get-go in order to facilitate a painless process.”

Here’s more information about each of the documents you’ll need to open a business bank account.

Your  articles of incorporation  show the bank how your business is structured, and you use these legal documents to register your business with the state and other entities.

“If you form a business as an LLC, limited partnership, corporation or other separate legal entity, to open a bank account, you will need the articles of incorporation that you filed with the state if you are the sole owner,” said Tiffany Wright, president of The Resourceful CEO, a financing advisory firm for small and midsize businesses, and project director at Cogent Analytics.

Rampenthal said that banks will likely ask for your current  business license  to prove you are legally permitted to conduct business in your region.

“This also ensures that your business is accountable for all actions, including taxes and finances,” he said. “Check with your state, county and local governments to determine if you need any licenses to operate your business.”

A  DBA, often referred to as a “fictitious name,”  allows you to conduct business “like marketing or advertising, or accept money, under a name that differs from the existing name of your business,” said Deborah Sweeney, CEO of MyCorporation.

Sweeney added that most banks require a certified copy of a DBA to open a business bank account, since entrepreneurs aren’t allowed to use their personal bank account under their business name.

“Filing for a DBA allows entities to do business under another name without having to form a new organization,” Sweeney said. “For example, imagine an entrepreneur named Tom Johnson. Tom is a sole proprietor who runs his own business and wants to open up a sandwich shop called Subs ‘n Chips. Tom wants this business to operate under the Subs ‘n Chips name and not under his own name, Tom Johnson. As such, he would need to register for a DBA so he could do business under this name, including accepting and signing checks made out to and on behalf of Subs ‘n Chips.”

If you’re a sole proprietor, you will need an EIN, your Social Security number, and a driver’s license or passport, according to Levi King, co-founder and CEO of credit solutions and monitoring firm Nav.

EINs are also used to prevent identity theft, fraud and money laundering. King added that while some banks allow a sole proprietorship to open accounts without an EIN, creating one is still beneficial.

Rampenthal said that the EIN is essential for managing taxes and paying employees.

“Sole proprietors may use their Social Security number for business tax purposes in lieu of an EIN,” he added. “You can  obtain an EIN for your business  by filing with the IRS.”

Finally, you’ll need to provide documents proving your identity.

Forms of proof “can include a government-issued picture ID, such as a driver’s license or passport,” Rampenthal said. “This is used in order to corroborate [that] the business owner is indeed the person who owns and/or runs the corresponding business.”

When should you open a business bank account?

The best time to open a business bank account is before you accept the first payment for your company’s goods or services. Typically, a business bank account is opened during the incorporation process. A  bank account cannot be opened until the business has a license to operate and an identifying tax number (which will be an employer identification number or a Social Security number for a sole proprietorship).

What is the difference between a bank and a credit union?

Banks and credit unions primarily offer the same services to customers and members. Both are designed to provide money management (such as checking and savings accounts), loan services, and other financial services.

The differences stem from the organization, classification and regulation surrounding each type of financial institution. Banks are for-profit businesses that can be singly or publicly owned. Credit unions are, by definition, nonprofit institutions. Union members collectively own them, so no credit union can ever be a sole proprietorship.

The difference in classification has led to differences in regulations for the two types of institutions. Many of the rules that were instituted after the 2008 financial crisis were not applied to credit unions. Services at banks and credit unions might have different fees or interest rates attached to their services, and approval processes will vary. Credit unions, for example, may have requirements pertaining to who can be credit union members. For example, many credit unions limit membership to residents of the county where the credit union is located.

Is it better to apply in person or online?

Rampenthal said that some banks do not offer the option of opening a business account online, either to reduce the risk of identity theft or due to the nature of certain businesses.

Banks that do offer the option of applying for a business bank account online may take more time to review your documents and set up the account than they would if you applied in person.

If the bank you choose offers both application options, you’ll need to decide which option (and trade-off) is preferable: the convenience of applying online but waiting longer for your account to be set up or applying in person and having your account set up the same day.

Matt D’Angelo and Simone Johnson contributed to the reporting and writing in this article. Some interviews were conducted for a previous version of this article.

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• Best Business Bank Accounts

Best Business Bank Accounts Of June 2024

Fact Checked

Updated: Jun 24, 2024, 7:39am

 A business bank account is a necessity for any business owner who takes their venture seriously. Whether you’re looking for business checking, savings or money market accounts, the best business bank accounts come with low fees, convenient digital tools and competitive rates. Annual percentage yields (APYs) and account details listed below are accurate as of June 6, 2024.

Why you can trust Forbes Advisor

Our editors are committed to bringing you unbiased ratings and information. Our editorial content is not influenced by advertisers. We use data-driven methodologies to evaluate financial products and companies, so all are measured equally. You can read more about our editorial guidelines and the banking methodology for the ratings below.

• 80 of the top nationally available banks analyzed
• 33 of the highest scoring banks scrutinized
• 5 of the best banks in the U.S. banks unveiled
• Featured Partner

Best Business Bank Accounts of 2024

Summary: best business bank accounts, methodology, guide to business bank accounts, what is a business bank account, how do business bank accounts work, types of business bank accounts, business bank account fees, pros and cons of business bank accounts, how to choose a business bank account, how to open a business bank account, alternatives to business bank accounts, frequently asked questions (faqs), next up in banking.

• Best CD Rates
• Best High-Yield Savings Accounts
• Best Money Market Accounts
• Best Online Banks
• Best Checking Accounts
• Best Business Checking Accounts

Axos Business Premium Savings

Annual Percentage Yield

Minimum Deposit Requirement

Monthly Maintenance Fee

• Earn 4.01% APY* With Business Premium Savings
• Free domestic and international incoming wires
• No monthly maintenance fee
• No minimum opening deposit
• No average daily balance requirement
• Business deposit accounts FDIC insured up to $250k

Best for High-Revenue Businesses

Pnc treasury enterprise plan.

We picked the PNC Bank Treasury Enterprise Plan for small and medium-sized businesses with higher transaction volumes because it includes up to 2,500 free transactions and $50,000 in deposits a month. This package also includes Cash Flow Insight tools for accounts receivable and payable, invoicing, payments and more.

• High transaction and cash deposit limits
• Can link multiple business bank accounts
• Occasional cash sign-up bonus
• May earn cash back and earnings credits
• Highly-rated mobile app
• High monthly fee
• Extra fees for business services
• High minimum balance requirement to avoid fees
• Does not earn interest

This plan includes a PNC Analysis Business Checking account and one of two investment accounts—the Premium Business Money Market account or the MMDA Sweep account.

You can have multiple business checking accounts under this plan to consolidate transactions, fees and account management. Four beneficiary checking accounts can be added at no cost, but there is a $10 monthly maintenance fee for each account after that. There is a $100 minimum deposit to open the Treasury Enterprise Plan and a steep $50 monthly fee. To waive this, you’ll need to maintain an average combined balance of $30,000

Fees are assessed for additional banking services. This includes the Cash Flow Insight tools (Payables, Receivables and Accounting Software Sync), which require a $20 monthly subscription. The checking account does not earn interest.

Best for Cash Deposits

Wells fargo business market rate savings account.

We like the Wells Fargo Business Market Rate Savings account because you can make up to 20 deposits, $5,000 in cash, free each statement period. This account can also serve as overdraft protection for your checking.

• Overdraft protection for linked business checking
• Check-writing privileges
• Fees for excess cash deposits
• Lower interest rate than similar accounts

Interest is earned on all balances over $0. Interest is compounded daily and credited monthly. While the rate isn’t too impressive at 0.01% APY, this account offers convenience in the form of check-writing privileges and low balance and deposit requirements.

There’s no pressure to save a lot because all balances earn the same rate, and you only need a balance of $300 to waive the $5 monthly fee. You can also waive it by making $25 in automatic transfers from a Wells Fargo business checking account.

Best for High Balances

Wells fargo business platinum savings.

0.25% to 2.50%

We picked the Wells Fargo Business Platinum Savings account for customers who have a lot of money to deposit because its tiered interest rate system pays up to 2.50% APY, but you’ll need to maintain a high balance to earn the best rates.

• Competitive tiered interest rates

Interest is compounded daily and credited monthly. All accounts earn interest, but those with balances of $1 million or more can earn the higher APY on deposits. Here’s how the interest rates shake out by balance tier:

In addition to earning interest, the Business Platinum Savings account offers overdraft protection for Wells Fargo business checking accounts and the unique ability to write checks directly from savings. There are over 11,000 Wells Fargo ATMs nationwide.

This account has a $15 monthly maintenance fee that can be waived by maintaining a $10,000 average daily balance or opening a linked business checking account. Checking accounts that can be linked to avoid the monthly fee are Navigate Business Checking and Optimize Business Checking.

Free cash deposits are limited to $5,000 or 20 transactions per month. This savings account is a worthy option for high balances and convenient cash access, but it’s not ideal for saving on a smaller scale.

Best for High-Yield Business Savings

First internet bank business money market savings.

3.46% or 5.48%

3.46% with a daily balance of $5,000,000 or below or 5.48% with a daily balance above $5,000,000

The First Internet Bank Business Money Market Savings account ranked best for high yields because it earns 3.46% APY with a daily balance of $5 million or below and 5.48% APY with a daily balance above $5 million. This is a stand-out account for its interest rates alone, but it also earns a spot as one of the best business bank accounts because of its low fees and easy-to-meet requirements.

• Competitive APY
• Highly rated mobile app
• Waivable monthly fee
• ATM cards available for sole proprietors only
• No physical branches
• Monthly transaction limits
• Must maintain a daily balance over $5 million to earn the higher yield

With just $100, you can open this money market account and start earning. The $5 monthly maintenance fee is lower than many competitors and waived with a balance of $4,000. Consider this savings option if you want to maximize your interest earnings on excess funds.

This account allows up to six transfers or withdrawals per calendar month or statement cycle before an excess transaction fee is assessed. Interest is compounded and credited monthly on the last day of the month.

Best for New Small Businesses

Axos bank basic business checking.

We chose the Axos Bank Business Checking account for new small business because it has no monthly maintenance fees, no minimum opening deposit or balance requirements, and offers unlimited fee-free transactions.

• No monthly maintenance fee or minimum balance requirements
• Unlimited free transactions
• Unlimited domestic ATM reimbursement
• Compatibility with QuickBooks
• Complimentary first set of paper checks
• No physical bank branches
• Fees for paper statements, checks and outgoing wire transfers

This account does not earn interest. You’ll also get unlimited domestic ATM fee reimbursements, up to 60 fee-free remote deposits each month, and two outgoing domestic wire fee reimbursements each month.

In addition to being packed with valuable perks, this account regularly offers one of the best business bank account bonuses , so you can potentially earn a cash bonus just for opening a new account. Welcome bonus offers run for a limited time, and you must meet certain balance and activity requirements to qualify.

This account is compatible with QuickBooks. Accountholders can access up to $175 in insurance coverage through Axos Bank InsureGuard+ Savings from IntraFI Network Deposits.

Axos offers a cash bonus of up to $400 when opening an account and meeting certain requirements by June 30, 2024, using offer code NEW400. To qualify, you must make a deposit within 30 days of opening your new account, and your balance will be used to determine the amount of your bonus. To earn $400, which is paid as $100 for up to four statement cycles, you will need to have an average balance above $50,000 in your new account and a minimum of 10 POS transactions of at least $3 each posted to your account each month. You need to submit an application by June 30, 2024 to qualify.

Business owners who are also interested in opening a personal checking account can qualify for a bonus of up to $700 when they open a business checking account and a high-yield Rewards Checking account at the same time. To qualify for this bonus, you will use the code AXOS700 to apply for both accounts by June 30, 2024. Then, you must meet individual bonus requirements for each account.

Best for Cash Back

Lendingclub tailored checking account.

Up to 1.50%

1.50% APY on the first $100,000 of any balance and 0.10% APY on balance portions over 100,000

$0 with monthly balance of $500

The LendingClub Tailored Checking account ranked highly because it’s one of the best business checking accounts for earning rewards and saving money. It earns 1.50% APY on the first $100,000 of any balance and 0.10% APY on balance portions over 100,000. In addition, signature-based debit card transactions can earn 1% cash back, assuming you meet account requirements and have a balance of at least $500.

• Account earns interest and cash back, provided requirements are met
• Unlimited transactions and ATM fee rebates
• Access to digital invoicing and point-of-sale solutions
• Phone and live chat support available seven days a week
• Monthly maintenance fee on balances under $500
• No physical bank branch locations
• Charges for both incoming and outgoing wire transfers

There is a $10 monthly maintenance fee for this account, but it’s waived if you keep a $500 average monthly balance. There are very few fees, and LendingClub partners with Autobooks for quick and easy digital invoicing and payments. You can also process unlimited transactions and get ATM fee rebates for out-of-network transactions.

If your account has a zero balance for more than three months, LendingClub reserves the right to close it without notice. Interest compounds daily and is credited monthly on the last business day of each statement cycle. Cash-back rewards will be credited to your account by the tenth calendar day of the month following the month in which they were earned. 

The LendingClub Tailored Checking account does not have active sign-up or referral bonuses at this time.

Best for Customer Service

Td business savings.

We chose the TD Bank Business Savings account for best customer service because it regularly makes best business banking lists, owing in part to the bank’s high customer satisfaction ratings and in-person banking access. TD Bank was ranked third-best in J.D. Power’s 2022 and 2023 U.S. National Banking Satisfaction Studies. The bank also offers wider in-person access than many banks on our list.

• Low minimum deposit and balance requirements
• 24/7 live customer service
• Only available in 16 states
• Lower interest rate than many accounts

TD Bank’s Business Savings account has low monthly fees, overdraft protection for linked TD Bank business checking accounts and low deposit and balance requirements working in its favor. It also earns interest, but the standard rate is just 0.05% APY. However, yields vary by state, and you may be able to qualify for an adjusted rate by speaking to your branch manager. This account is recommended for businesses with smaller balances that value customer service.

ATM withdrawals are free at any TD Bank location, with around 2,600 available in the U.S. (primarily on the East Coast). TD Bank operates in 16 states on the eastern side of the country, so businesses outside the bank’s service area are out of luck.

The TD Business Savings account has a low $25 minimum deposit requirement and a $5 monthly maintenance fee that can be waived by maintaining an average daily balance of $500.

To open an account with TD Bank, your business must be located in a state where TD Bank operates: Connecticut, Delaware, Florida, Massachusetts, Maryland, Maine, North Carolina, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, South Carolina, Virginia, Vermont, or Washington, D.C. Free cash deposits are limited to $5,000 per statement cycle.

Best for Unlimited Transactions

First internet bank do more business™ checking.

with average daily balance of $10,000

The First Internet Bank Do More Business Checking account won best for unlimited transactions because it doesn’t have transaction limits, any minimum deposit or balance requirements, or monthly maintenance fees. It also earns 0.50% APY for accounts with an average daily balance of $10,000 and reimburses up to $10 per month in ATM fees.

• Interest on checking balances of at least $10,000
• Monthly ATM fee reimbursement of up to $10
• Several deposit accounts available
• $10,000 minimum balance to earn interest
• No ATM network or partner network

Interest for this account is compounded and credited monthly on the last day of each month.

The “Balance Optimizer” feature lets you automatically transfer funds between your Do More Business Checking and business savings accounts with First Internet Bank to earn more interest. You’ll set a target checking balance, and the bank will move extra funds to higher-earning accounts.

The Do More Business Checking account is a simple, no-fee account ideal for small business owners who prefer online banking and don’t want to worry about fees or limits. Plus, you’ll have access to money management tools through the dedicated First IB Business Banking app.

The First Internet Bank Do More Business Checking account does not have active sign-up or referral bonuses at this time.

Best for Treasury Management Services

First internet bank commercial analyzed checking.

We chose the First Internet Bank’s business checking for the treasury management services that come with its Commercial Analyzed Checking account. These include commercial deposit services, payables and receivables, and sweep services. The account also comes with credit card processing and corporate credit cards. There is no fee for the services listed and no monthly service fee.

• Wide range of commercial banking services
• No minimum deposit requirement
• Several deposit account options
• No ATM network
• Cash deposits not accepted

This account also permits unlimited fee-free transactions and requires an opening deposit of just $100.

To make this list, Forbes Advisor pulled data from business checking accounts, savings accounts, money market accounts and CDs at 154 traditional banks, online banks and credit unions. We used the following metrics to rank each account:

• Branch and ATM access
• Digital experience
• Customer experience

Our analysis of fees included monthly fees, excess transaction fees, overdraft fees, ATM fees, deposit fees and early withdrawal penalty fees. Access looked at the number of fee-free ATMs and in-person branches, while digital experience took into account App Store and Google Play ratings. Customer experience considered merchant services, integration with business tools, customer service ratings and live chat availability.

We gave different weights to each metric depending on the type of account, and subcategories varied slightly. Some accounts were also scored using deposit and transaction limits and business features.

Business bank accounts with lower and fewer fees, wider accessibility, better digital and customer experience scores and lower minimum deposit and balance requirements were ranked higher.

To learn more about our review methodology and editorial process, see How Forbes Advisor Reviews Banks .

A business bank account is a specialized account business owners use to manage their finances. Unlike personal accounts, they’re designed to handle larger volumes of transactions and offer features tailored to business operations, like payroll services or merchant payment processing.

Having a business bank account separates your personal and business finances, simplifies tax reporting and helps you look professional to clients and suppliers. It may also make it easier to qualify for a business line of credit.

Business checking account¹

The account has no hidden fees, no monthly maintenance fee and no minimum balance requirement. Novo Business Checking offers free transfers, mailed checks and incoming wires and ATM fees are refunded up to $7 per month. The account integrates with other small business tools including Stripe, Shopify and QuickBooks. It also integrates with Zapier and Slack.

Novo’s highly rated business banking app earns 4.8 out of 5 stars on the App Store and 4.6 out of 5 on Google Play.

¹Novo is a fintech company; not a bank. Deposit account services provided by Middlesex Federal Savings, F.A., Member FDIC. Physical debit cards issued by Middlesex Federal Savings or Patriot Bank, N.A., Member FDIC; virtual cards issued by Patriot Bank, pursuant to licenses from Mastercard® International Incorporated. Mastercard can be used everywhere Mastercard is accepted. Mastercard is a registered trademark of Mastercard International Incorporated.

Business bank accounts function as a hub for all financial transactions related to a company’s operations. They’re established under a business’s legal name, so business finances stay separate from the personal finances of the owner or owners.

Just like personal accounts, you can access a business bank account online, through an app or by visiting a bank branch. Once you open an account, you can usually:

• Deposit earnings
• Manage payroll
• Pay for services and supplies
• Make withdrawals or transfers
• Write checks
• Use your debit card
• Set aside money for taxes and future expenses
• Handle any other financial transactions related to your business

When it comes to managing your business finances, choosing the right type of bank account is crucial. Each type of account serves a different purpose and comes with unique features to support your business needs.

Business Checking Accounts

A business checking account is designed for daily transactions. It’s essential for managing your company’s cash flow. This is where you can deposit and withdraw money, pay bills and make purchases. Most business checking accounts come with a debit card and possibly a checkbook for transactions.

Business Savings Accounts

A business savings account helps you build up a cash reserve for your business. It’s where you set aside any funds you’ll need for the future, whether it be to pay taxes, buy equipment or cover your expenses during leaner months. Business savings accounts often earn interest, but there may be a limit to how many withdrawals you can make per month. Many savings accounts allow you to link business checking accounts for one-time or automated transfers.

Business Money Market Accounts

A business money market account is similar to a savings account in that it earns interest and provides a place to build up cash reserves. However, this type of account typically comes with some features of a checking account, such as an ATM card or paper checks, that offer easier access to your funds. Money market accounts may pay higher interest rates than savings accounts but can also have steep balance requirements.

Business Credit Cards

A business credit card is a powerful tool for managing expenses and cash flow, as well as building a credit history for your business. These allow for flexible spending and can provide rewards on purchases and even statement credits on spending. But just like personal credit cards, it’s vital to use business credit cards wisely. Taking on high-interest debt can impact your company’s financial health.

Business Merchant Accounts

If your business accepts credit or debit card payments, you probably need a merchant account . This type of account acts as a holding area for card payment funds before they’re transferred to your business’s checking account.

When looking for the best bank for business accounts, fees should be top of mind. Depending on which institution you go with, you may encounter these common business bank account fees:

• Monthly fees. Many banks charge a monthly maintenance fee for business accounts. These fees vary depending on the institution, though some offer free business checking with no monthly fee or provide options to waive it by maintaining a certain minimum balance.
• Transaction fees. Business accounts often come with a set number of free transactions per month. Exceeding this limit may result in additional fees per transaction.
• Overdraft fees. If your account balance goes negative, banks may charge an overdraft fee. To avoid this, monitor your account balance and consider setting up overdraft protection.
• ATM fees. Banks might charge a fee when you withdraw cash from an ATM outside their networks. Some offer ATM fee refunds to cover a certain number of such transactions.
• Wire transfer fees. Sending or receiving wire transfers typically incurs a fee. These fees vary depending on the sender’s location, the type of transfer and the transfer amount.
• Stop payment fees. If you request your bank to stop processing a check payment you’ve sent, you’ll likely pay a stop payment fee.
• Cash management services. Your business may take advantage of cash management services like treasury and remote deposit services. These services can help streamline your cash flow, but they often come with added fees.

Business bank accounts come with a mix of benefits and drawbacks.

• Separates your business and personal expenses and makes it easier to track cash flow
• Offers a professional way to receive and make payments
• Helps you build credit for your business, which can be beneficial for future loans
• Simplifies tax filing and financial reporting by keeping all business transactions in one place
• Gives you access to additional banking tools like payroll management, merchant services and lines of credit
• May have more fees than personal accounts
• Some have transaction fees and limits
• Set up may require more paperwork than a personal account

Selecting the right bank account is pivotal for managing your business finances effectively. Here’s a streamlined process to guide you:

• Identify your needs. For instance, do you need a business checking account for daily spending and deposits or maybe a business savings account for surplus funds?
• Consider the fees. Look for accounts with no monthly fees or fees you can easily waive. Also note other fees that may apply, such as overdraft fees, ATM fees, transaction fees and more.
• Verify minimum balance requirements. Determine if you can comfortably meet the minimum balance required to open an account or avoid monthly fees.
• Review transaction limits. Ideally, the account you choose shouldn’t have transaction limits. But if it does, choose a limit that won’t result in additional charges for your company.
• Compare interest rates. If you’re opening a business savings account, compare the interest rates to other savings accounts to ensure you’re maximizing your returns.
• Evaluate ease of use. The best business bank accounts should be user-friendly, with easy-to-use online banking options and good customer service.
• Explore additional services. Find out if the bank offers merchant services, credit lines or other financial products that might benefit your business now or down the line.

Opening a business bank account looks a lot like opening any bank account, but it often requires more documentation.

• Gather necessary documents. These may include your business formation papers and Employer Identification Number (EIN). You can apply for an EIN online . Some banks let you use your Social Security number if your business is set up as a sole proprietorship.
• Decide on the type of account you want. Do you want a checking or savings account? Or does a money market account appeal to your needs? Each account type comes with its own set of benefits and requirements, and you can always open multiple accounts.
• Compare different banks and their offerings. Consider key factors like minimum opening deposit requirements, monthly fees, transaction limits and extra services. Choose an account that gives you more tools and benefits while asking less of you.
• Apply for an account. Visit your chosen bank or credit union’s website and follow the instructions to open a business account. You’ll need to fill out an application and provide some information about your business and its authorized account users. This is also where you’ll submit any required documentation, like your EIN, formation documents and business license.

Banks often require a minimum opening deposit. This varies between institutions, so make sure you’re aware of the specific amount needed to fund your new account when applying.

How To Open a Business Bank Account With Bad Credit

Most banks don’t check your personal credit score when you apply for a business bank account. So having bad personal credit typically won’t prevent you from opening a business checking account.

However, many banks do use ChexSystems when reviewing applications for business checking accounts. ChexSystems is a reporting agency that provides information on how you’ve handled checking and savings accounts in the past.

If you have any negative marks on your ChexSystems report, like unpaid fees, bounced checks or overdrafts, this could impact your business account application. Use these tips to find out if a bank uses ChexSystems for business checking accounts.

• Ask a bank representative directly before applying. Let them know you’re interested in opening a business checking account and want to know their screening process, including if they use ChexSystems.
• Grab a copy of your ChexSystems report. If you have a banking history, request a copy of your ChexSystems report to see if you have any negative marks. This can give you an idea of whether your report would impact applications.
• Find a business bank with no ChexSystems verification. If you’re concerned about getting denied due to a poor banking history, find banks that don’t use Chexsystems . Or, look for second chance bank accounts , which are designed for people who are rebuilding their banking history.

If you’re not ready to commit to a traditional business bank account, there are several alternatives that can still help you manage your business finances:

• Personal bank accounts. Some small business owners may opt to use their personal bank accounts for business transactions. This can be a simple short-term solution, but keep in mind that it lacks the features and legal separation that business accounts provide.
• Online payment platforms. Services like PayPal, Venmo or Stripe offer business accounts that can handle transactions and sometimes even allow you to hold a balance. These can be easier to set up and offer more immediate access to funds than other accounts, but they may not come with FDIC insurance .
• Prepaid business cards. These can be loaded with funds and used like credit cards for business purchases without the need for a bank account. They help with budgeting and expense tracking but don’t offer interest or credit.

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What documents do i need to open a business bank account.

On the personal side, you’ll need a valid ID like a driver’s license as well as your Social Security number. For business documents, you’ll need your business license. You may also need an Employer Identification Number (EIN) and business registration if you’re an LLC, and a DBA (“Doing Business As”) certificate if you’re a sole proprietor operating under a different name than your own. Check with the specific bank for its list of required business documents.

How many bank accounts should a business have?

At the very least, every business should have a checking account to manage income and expenses. This account is also necessary for separating personal and business finances. Beyond this, you may also want a business savings account to earn interest on the money you’re setting aside for taxes, emergencies, seasonal dips in revenue and other future expenses. The total number of accounts you should have depends on your business needs.

How do you open a small business bank account?

You can open most small business bank accounts online, although some institutions may require you to open one in person. When applying, be prepared with a personal ID and each owner’s Social Security number, as well as business documents that match your business structure, like your business formation documents, a business license and ownership agreements. If your account requires an initial deposit, you’ll complete this step once you’re approved.

Why do you need a business bank account?

There are several reasons why you need a business bank account . First and foremost, having a business bank account helps you keep company and personal finances separate. This is important for recordkeeping, taxes and liability protection. It can also help you qualify for other business products down the road, like a business credit card, line of credit or loan.

How long does it take to open a business bank account?

It’s best to set aside 30 minutes to an hour to open a business bank account. But the timeframe can be shorter or longer depending on the paperwork you need and whether you’re applying online or in person. Oftentimes, banks will tell you on their website about how long the application process takes.

How do you use a business bank account?

You’ll use a business bank account similarly to how you use a personal account. If it’s a checking account, you’ll pay bills, receive payments, deposit checks and more. If it’s a savings account, you’ll deposit money that you don’t plan on using right away. The main difference is that your business accounts will only be used for business income and expenses, not personal ones. Also, your account may have extra features not found with personal accounts, like cash management tools.

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Cassidy Horton is a finance writer covering banking, life insurance and business loans. She has worked with top finance brands including NerdWallet, MarketWatch and Consumer Affairs. Cassidy first became interested in personal finance after paying off $18,000 in debt within 10 months of graduating college. She later went on to triple her salary in two years by ditching her 8-to-5 job to write for a living.

• By Michael Anderson
• Last Updated June 23, 2024

Essential Checklist: What Do You Need Open a Bank Account Easily

To open a bank account, you need to be prepared with the right paperwork and personal details. This guide cuts straight to the chase: a practical rundown of the essentials, so you can walk into the bank or log on to their website with confidence. Discover “what do you need open a bank account” – which IDs, documents, and information are non-negotiables for your new account—and why—without getting swamped in minutiae.

Table of Contents

Key takeaways.

To open a bank account, primary and secondary forms of identification, such as a driver’s license and credit card, are necessary to establish identity.

Verification of the Social Security number (SSN) or Taxpayer Identification Number (TIN) is required for compliance with federal regulations and taxes, while proof of address through utility bills or a mortgage statement is required to confirm residency.

Choosing the right account type and meeting the initial deposit requirements is crucial, and additional steps include selecting between a bank and a credit union, with each offering different fees, rates, and services.

Gathering Your Identification

Embarking on the journey of opening a bank account begins with the cornerstone of identification. Imagine standing at the gates of the financial fortress; your government issued photo ID, such as a driver’s license, is the key that unlocks these gates. A driver’s license or a passport is not just a ticket to travel or a means to drive; it’s your golden ticket to the banking world.

But what if you hail from distant shores? Fret not, as non-U.S. citizens can present a potpourri of alternative identification such as a passport, alien identification card, or home country government issued photo.

Secondary Identification

But why stop at one key when two will bolster your security? A secondary form of identification serves as an added layer of assurance, proving your identity beyond a shadow of a doubt. This could be anything from a credit card to an employee or student ID, or even another document blessed by a government agency.

These personal details are the threads that weave the tapestry of your financial identity, creating a richer, fuller picture for institutions to understand who you are.

Verifying Your Social Security Number

Now, let’s talk numbers, and not just any numbers—your Social Security number (SSN) or Taxpayer Identification Number (TIN). This isn’t just a sequence of digits; it’s a numerical shadow that follows you through the labyrinth of financial bureaucracy. Banks require this to comply with federal regulations and to whisper sweet nothings about your interest income to the IRS,.

Moreover, your SSN or ITIN is a beacon that shines upon your identity, confirming you are who you say you are.

Address Confirmation Essentials

As you progress further, you’ll need to plant your flag and prove your homestead. This isn’t a mere formality; it’s a crucial declaration of your domicile. A utility bill or a mortgage statement does more than just state your consumption; it anchors you to a physical reality in the eyes of the bank,. Whether it’s the bill from your last Netflix binge or the proof of the roof over your head, these documents are your testament of residency,.

Initial Deposit Requirements

With your identity firmly established, it’s time to sow the seeds of your new financial relationship with an initial deposit. Whether you choose the crispness of cash, the certainty of a check, or the modernity of an electronic transfer, this initial offering can be a humble beginning or a grand gesture, with minimum deposit requirements varying from a minimalist $0 to a moderate $100. Bear in mind, though, that this isn’t just a deposit; it’s a commitment that could bloom into waived fees or lusher interest rates.

Account Types and Their Deposits

But what vessel to choose for your financial voyage? Here are some options:

Checking accounts: swift boats for daily transactions, with each checking account tailored for your needs

A savings account: sturdy ship for your wealth to weather the storms of time

Business bank accounts: the flagship that requires not just a captain’s personal information but also the charter of the business entity

Remember, the size of your initial treasure chest may vary bank account depending on the type of account and institution you choose.

The Process of Opening a Bank Account Online

Gone are the days of navigating through crowded banks; the digital age allows you to open a bank account online, including a checking account online, from the comfort of your abode. Here’s how an account holder can get started:

Select your desired account type like a discerning shopper.

Gather your personal documents as if assembling a dossier.

Fill out the application with the precision of a calligrapher.

However, just as you wouldn’t invite a stranger into your home, ensure you’re using a secure internet connection to keep prying eyes away from your personal information.

Required Digital Documentation

In this digital era, even documents have shed their papery skin to don a more ethereal form. You may need to whisk copies of your ID or proof of address through the virtual realms of fax or email to the awaiting arms of your chosen institution. And if you’re embracing the paperless billing world, a printed billing statement can serve as a trusty steed to carry proof of your domicile across the digital divide.

Choosing Between Bank and Credit Union

As you stand at the crossroads, you must choose your financial ally—bank or credit union? Each path offers its own landscape of fees, interest rates, and services. Credit unions, with their community-spirited ethos, often boast lower fees and better rates, but they may request a secret handshake in the form of membership criteria,.

Banks, as a type of financial institution, might offer a more diverse bouquet of services, but at the cost of higher fees, as they dance to the tune of profits and shareholders.

Special Circulations for Joint Accounts

Should you choose to intertwine your financial fate with another, opening a joint account is akin to performing a duet. Both parties must take the stage together, presenting a symphony of personal information and harmonized identification. Such partnerships are not confined to the ballroom of matrimony; they are open to any duo from romantics to relatives, provided they are of the age to sign their names to this fiscal pact.

Preparing for Additional Services

As you settle into your new banking abode, consider the additional amenities you may wish to enjoy. Overdraft protection is like an insurance policy for your finances, requiring a simple opt-in but offering peace of mind.

If you’re venturing into the realm of credit services, come prepared with pay stubs or tax returns, as these are the currency of credibility in the banker’s eyes.

Managing Money: Understanding Account Features

With your account aflutter with activity, it’s paramount to understand the tools at your disposal. Your banking app is more than a digital ledger; it’s a personal finance command center, equipped to manage transfers and provide a window into your spending habits,. Embrace these digital sentinels—budgeting tools and alert systems—that stand guard over your funds, ensuring you remain within the ramparts of your financial plan,.

Transitioning from an Old Account

Transitioning from an old account to your new banking bastion should be as seamless as the passing of seasons. Here’s how to do it:

Begin by mapping out the terrain of your automatic transactions.

Gradually reroute them to your new stronghold.

Keep a watchful eye on your former account as it fades into the twilight, ensuring no obligations are left behind.

Close the chapter on this financial history.

Protecting Your New Account

Now that you’ve planted your flag in this new financial ground, it’s imperative to erect strong defenses. Here are some measures you can take:

Use unique passwords as sentinels at your gates

Enable two-factor authentication to add a moat around your treasures

Employ the secret agents of biometrics and account alerts to keep watch over your realm

Never venture into the treacherous waters of public Wi-Fi without the cloak of a VPN

As the curtain falls on this financial odyssey, you stand ready, checklist in hand, to open a bank account with the confidence of a seasoned banker. From the initial dance of documentation to the final safeguarding of your new account, you are now equipped to navigate the once-daunting labyrinth with ease. Take that first step with assurance, knowing that your financial journey is bound for success.

Frequently Asked Questions

What alternative forms of id can non-u.s. citizens use to open a bank account.

Non-U.S. citizens can use a foreign passport, an alien identification card, or a government-issued photo ID from their home country to open a bank account. These are common alternative forms of ID accepted by many banks.

Can I open a bank account without a Social Security number?

Yes, you can open a bank account with an Individual Taxpayer Identification Number (ITIN) if you don’t have a Social Security number.

What are the minimum deposit requirements for opening a bank account?

Minimum deposit requirements for opening a bank account can vary, with some institutions requiring no deposit while others may require around $100.

How can I protect my bank account when using public Wi-Fi?

To protect your bank account when using public Wi-Fi, avoid banking transactions on public Wi-Fi and consider using a VPN to secure your connection and safeguard your financial information.

What should I do if I want to switch all my transactions from an old account to a new one?

To switch all your transactions from an old account to a new one, create a checklist of automatic transactions, update them to your new account, keep the old account active with some funds during the transition, and close it once all transactions have been successfully moved.

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What Documents Do You Need to Open a Bank Account?

Opening a bank account requires certain documents to verify your identity, including your address and Social Security Number. You might also need to provide an initial deposit of between $25 and $100.

Alvin Yam, CFP

Founder, Paraiba Wealth Management

Alvin Yam is a certified financial planner with over 15 years of experience working with individuals and corporations. He is an expert in wealth management and personal banking. Alvin is also the Founder and Managing Partner at Paraiba Wealth Management, an independent registered investment advisor. Prior to founding Paraiba, Alvin spent five years as a Director at HSBC overseeing retail and wealth products, and was also a Financial Consultant at Charles Schwab, advising clients on investments, retirement planning and banking products.

Casie McCoskey

Content Editor

Casie McCoskey is a professional editor passionate about providing people with accessible information on personal finance. Before MoneyGeek, she worked in the legal field, drafting and editing briefs and motions.

Updated: May 15, 2024

Advertising & Editorial Disclosure

• Required Documents
• Identification

Proof of Address

• Taxpayer ID
• Initial Deposit
• Documents for Kids
• Special Situations

Banking is an essential part of modern financial life. Whether you want a checking account for your day-to-day transactions or a savings account to grow your money, opening a bank account is usually the first step. However, banks have specific requirements to open an account that you'll need to fulfill to get started. Being prepared with the proper paperwork can make account opening hassle-free.

Key Takeaways

Most banks require specific documents to verify your identity and address. You may also need an initial deposit to open an account.

Valid identification documents can include a driver's license or state-issued ID card, U.S. passport or passport card, permanent resident card, Military ID or foreign passport (for non-U.S. citizens).

Commonly accepted documents for proof of address include a recent utility bill, lease agreement or mortgage statement.

Types of Documents You Need

Opening a new bank account requires providing certain documents to verify your identity and address. Most banks require government-issued photo identification, like a driver's license or passport. You'll also need to show proof of your residential address through documents like utility bills or lease agreements. Other common requirements include your Social Security number (or individual taxpayer ID for non-residents) and a minimum opening deposit.

Being prepared with the proper documentation streamlines the account opening process.

Identification Documents

One of the primary requirements to open a bank account is providing valid documents that prove your identity. Acceptable forms of ID typically include:

• Driver's license or state-issued ID card
• U.S. passport or passport card
• Permanent resident card (Green card)
• Military ID
• Foreign passport (for non-U.S. citizens)

Banks use these documents to verify your full legal name, date of birth and physical description. These help banks comply with anti-money laundering laws like the Bank Secrecy Act and the Patriot Act. Here are a few examples of what these documents look like:

Example of a driver license (http://dmv.dc.gov/service/dc-dmv-real-id-driver-license)

Example of state-issued ID card (https://dol.wa.gov/id-cards/id-card-designs)

If your ID has expired or will expire soon, consider renewing it before applying for a new bank account to avoid delays or rejection of your application.

In addition to identification, banks typically require proof of your residential address. Commonly accepted documents include:

• Recent utility bill (e.g., electricity, gas, water, cable/internet)
• Lease agreement or mortgage statement
• Vehicle registration or insurance card
• Payroll or government-issued document with your address

The address on these documents must match the one you provide when opening the account. If you've recently moved, update your address with the appropriate agencies before applying.

Example of vehicle insurance card from the New York State DMV (https://dmv.ny.gov/insurance/sample-insurance-id-card-fs-20)

Social Security Number (SSN) or Taxpayer ID

Banks ask for your Social Security number (SSN) when opening an account for U.S. citizens and residents. This nine-digit number, issued by the Social Security Administration, helps banks identify you for tax reporting purposes.

Non-U.S. residents may need to provide a taxpayer identification number, such as an Individual Taxpayer Identification Number (ITIN) or foreign tax ID instead.

Example of U.S. Social Security card

Initial Deposit to Open a Bank Account

Most banks and credit unions require you to make an initial deposit when opening a new checking or savings account. This minimum opening deposit amount can vary significantly between institutions. Typical requirements range from $25 to $100 or more at many brick-and-mortar banks. Online banks often have lower or no minimum deposit requirements to attract customers.

The deposit amount required can also depend on the type of account you’re opening. Basic savings accounts tend to have lower minimums than premium checking accounts with more features.

Documents Needed to Open a Bank Account for a Child

If you're opening a bank account for a minor, you'll typically need to provide:

• The child's birth certificate or Social Security card to verify their identity
• Your own valid ID and proof of address
• Minimum deposit (if required)

As the parent or legal guardian, you'll have ownership and control over the account until your child reaches the "age of majority," which is 18 or 21 in most states.

Additional Documents for Specific Situations

In some cases, banks may request additional documentation depending on your circumstances:

• If you're a non-resident alien, you may need a valid passport or visa and proof of income or employment authorization.
• Usually, sole proprietors and business owners opening a business account need an Employer Identification Number (EIN) and business registration documents.
• Trust accounts require paperwork showing the trust agreement, names of trustees and beneficiaries and their identification.

You can always contact the bank ahead of time to determine what documents you need to present for your situation.

Here are steps you can take to make opening a bank account fast and easy:

• Gather all required documents beforehand to avoid multiple trips to the bank.
• Call the bank or check their website to confirm the requirements.
• Consider opening an account online if you prefer convenience over visiting a branch.
• Be prepared to answer questions about your income, employment and the intended use of the account.
• Understand the bank's fees, minimum balance requirements and other policies before signing up.

FAQ About the Documents Needed to Open a Bank Account

Understanding the required documents to open a bank account can simplify the process. We answer some of the most common questions about the required documents.

To open a bank account, you typically need to provide the following documents:

• Valid ID, such as a driver's license, passport or state ID
• Proof of address, which can be a utility bill, lease agreement or a bank statement with your current address
• Additional documentation specific to your situation, such as a Social Security card or proof of employment

When opening a bank account for a minor , you'll typically need to provide:

Yes, non-U.S. citizens can generally open bank accounts. You'll usually need to provide a valid passport, visa and proof of income or employment authorization. Some banks may have specific accounts tailored to non-resident aliens, so it's best to inquire about their requirements and offerings.

Typically, the process involves four steps: providing personal information, submitting required documents, funding the account and verifying your identity. The number of steps can vary depending on the financial institution and whether you're opening the account in person or online.

Acceptable forms of ID to open a bank account include a driver's license, passport, state ID or other government-issued photo identification. Non-U.S. citizens may be required to provide a valid passport and visa as their primary forms of identification.

Yes, most banks require proof of address to open a bank account. Acceptable documents for proof of address include a utility bill, lease agreement or a bank statement with your current address.

No — all banks require a valid form of identification to open a bank account.

In-person account openings may be completed on the same day, while you can often open online accounts within minutes. Factors such as document verification and initial deposit may also impact the timeline.

If you're a non-U.S. citizen or resident, you may be able to open a bank account with alternative identification, such as a passport or taxpayer ID number, instead of an SSN. Requirements vary by bank.

Not necessarily. While many banks have minimum opening deposit requirements , some online banks and local credit unions may allow you to open an account with a $0 initial deposit.

About Alvin Yam, CFP

Alvin Yam is a certified financial planner with over 15 years of experience working with individuals and corporations. He is an expert in wealth management and personal banking. Alvin is also the Founder and Managing Partner at Paraiba Wealth Management, an independent registered investment advisor.

Prior to founding Paraiba, Alvin spent five years as a Director at HSBC overseeing retail and wealth products, and was also a Financial Consultant at Charles Schwab, advising clients on investments, retirement planning and banking products.

• New York State Department of Motor Vehicles . " Sample NY State Insurance ID Cards ." Accessed May 15, 2024 .
• DC Department of Motor Vehicles . " DC DMV REAL ID Driver License ." Accessed May 15, 2024 .
• Washington State Department of Licensing . " Examples of ID cards ." Accessed May 15, 2024 .

The content on this page is accurate as of the posting/last updated date; however, some of the rates mentioned may have changed. We recommend visiting the lender's website for the most up-to-date information available. Editorial Disclosure: Opinions, reviews, analyses and recommendations are the author’s alone and have not been reviewed, endorsed or approved by any bank, lender or other entity. Learn more about our editorial policies and expert editorial team .

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Can I Open a Business Bank Account Without an EIN?

Rosalie Murphy is a small-business writer at NerdWallet. Since 2021, she has covered business insurance, banking, credit cards and e-commerce software, and her reporting has been featured by The Associated Press, MarketWatch, Entrepreneur and many other publications. Rosalie holds a graduate certificate in Quantitative Business Management from Kent State University and is now pursuing an MBA. She is based in Chicago.

Ryan Lane is an editor on NerdWallet’s small-business team. He joined NerdWallet in 2019 as a student loans writer, serving as an authority on that topic after spending more than a decade at student loan guarantor American Student Assistance. In that role, Ryan co-authored the Student Loan Ranger blog in partnership with U.S. News & World Report, as well as wrote and edited content about education financing and financial literacy for multiple online properties, e-courses and more. Ryan also previously oversaw the production of life science journals as a managing editor for publisher Cell Press. Ryan is located in Rochester, New York.

Many or all of the products featured here are from our partners who compensate us. This influences which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money .

Sole proprietors and some single-member LLCs can open a business checking account without an employer identification number (EIN) at many financial institutions. Instead, you’ll have to provide your Social Security number to verify your identity.

Even if you don’t need an EIN for a business checking account , it’s a good idea to apply for one. These unique business tax ID numbers issued by the IRS are fast and free to get, and you’ll need an EIN if you ever hire employees or contractors, for instance.

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Bluevine Business Checking

Business bank accounts you can open without an EIN

The following financial companies let sole proprietors apply for business bank accounts with a Social Security number instead of an EIN. Some single-member LLCs may be able to apply without an EIN, too.

If you feel comfortable with digital banking, consider an online business checking account . These accounts usually have no minimum opening deposit, unlimited transactions and few fees, though you may run into low cash deposit limits. Accounts available without an EIN include:

Bluevine , which pays 2.00% APY on all balances.

Found , which integrates with many gig work apps.

LendingClub , which pays 1% cash back on debit card purchases.

Lili , which lets you receive some ACH payments up to two days early. 

Novo , which comes with built-in invoicing.

Brick-and-mortar banks are more likely to limit the number of transactions you can make each month and charge monthly fees. But if you like being able to walk into a branch location, consider these options:

Bank of America , which allows unlimited electronic transactions.

BMO Harris , which lets customers use an extra 40,000 Allpoint ATMs for free.

Chase , which currently offers a $ 300 sign-up bonus.

Huntington , which offers a 24-hour grace period when you overdraft.

TD Bank , which provides 24/7 customer service over the phone.

» MORE: Best business bank accounts for sole proprietorships

Do you need an EIN to open a business bank account?

Banks won’t always require an EIN to open a business account. But you might have to get one based on your business structure: The federal government requires an EIN if you plan on doing business as a partnership, multimember LLC or corporation.

An EIN isn’t always mandatory for sole proprietors or single-member LLCs — unless you have employees or one is legally required for tax purposes. Consult your accountant or a tax professional if you’re unsure what’s necessary for your business.

Banks must verify customer information before allowing them to open an account. Requiring an EIN to prove your business’s identity and the nature of your business is one way to do this. However, you also won’t be able to open a business account with just an EIN; some personal information and additional documentation will be required.

Benefits of opening a business bank account with an EIN

Even if an EIN isn’t required for your business, there are many benefits to getting one before you open a business bank account .

It’s easy to do. Applying for an EIN is free, and you can get one immediately online through the IRS website. You can also get an EIN via fax or mail. International applicants have to apply by phone. 

It'll help separate your personal finances and business finances. Not only is this step important for record-keeping and tax time, but it can also help protect your personal assets if your business runs into legal trouble. Plus, having your business name and branding on your account (rather than your personal information) makes you appear more professional to potential clients or investors.

You'll have access to a wider selection of accounts. Whether you prefer a credit union, national bank or online-only banking experience, having an EIN generally means you’ll have one fewer hurdle to jump to qualify for the account you want. For instance, if you’re a single-member LLC, you may not be legally required to have an EIN. But getting one before you open a business bank account for your LLC will ensure you have as many options as possible.

It sets you up for future growth. Having a bank account tied to your business lays the foundation for other actions that can help you build business credit — for instance, applying for a small-business loan, then spending responsibly and repaying debt on time.

GOBankingRates works with many financial advertisers to showcase their products and services to our audiences. These brands compensate us to advertise their products in ads across our site. This compensation may impact how and where products appear on this site. We are not a comparison-tool and these offers do not represent all available deposit, investment, loan or credit products.

6 Ways To Completely Turn Around Your Finances After Hitting Rock Bottom

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Hitting financial rock bottom is more common that you might think. As recently as 2019, there were more than 750,000 non-business bankruptcy filings in the U.S., according to Debt.org. That figure had been chopped in half by 2022 — mainly because of COVID-era debt relief efforts — but bankruptcies have been on the rise since then.

Meanwhile, a large percentage of Americans are just one missed paycheck or unexpected expense away from financial hardship. Nearly half (49%) of U.S. adults surveyed by LendingTree said they wouldn’t be able to cover a $1,000 emergency using only cash or their bank accounts.

Separate research cited by CNBC found that one-third of American consumers with annual incomes between $50,000 and $100,000 have enough emergency fund savings to cover at least six months’ worth of living expenses — which means two-thirds don’t.

If you find yourself hitting rock bottom financially, the first thing you need to do is not panic. Next, develop a strategy to dig your way out of it. Here are six ways to turn around your finances after hitting rock bottom .

Don’t Dig Any Deeper

Whether your financial problems are due to overspending, too much debt or something else, you need to stop the hole from getting any bigger.

If you are in debt, don’t add to it. If you are spending more than you can afford, figure out a way to stop that as well. Adopting the right habits immediately will help you move forward to the next steps.

Make a Debt Repayment Plan

Begin by figuring out how much debt you have , who your creditors are, how much interest you are paying, and which debts you are behind on. If you have the financial wherewithal to pay the debts on your own, one strategy is to pay the high-interest debts first and then work your way to the lower-interest debts.

If the debt load is unmanageable, you can negotiate with your creditors to get reduced interest rates or temporary payment plans, or sign up for a debt consolidation program that lets you pay all your debts in a single monthly installment.

Research Government Assistance Programs

Government assistance can serve as a stop-gap measure to help get you back on your feet until you return to a position of financial strength. Federal, state and local programs are available to help you pay for groceries, rent, utility bills, medical care, childcare and other expenses.

Visit Benefits.gov to find out what kinds of programs are available.

Create a Realistic Budget

Many consumers follow the 50/30/20 budget rule, which means allocating 50% of your budget to essentials such as housing and groceries, 30% to non-essential “wants” like dining out or gym memberships, and 20% to savings. But if you are in a big financial hole, you might need to tweak the “30%” part until you dig your way out of it.

This means putting that money into lowering your debt and paying off other bills instead of spending it on non-essentials.

Make Savings a Habit

Although it might seem impossible to save money when you are under a pile of bills, you should still prioritize putting some money into savings every month or pay period. Even if it’s a small amount like 5% of your budget, developing the savings habit and earning interest every month will improve your finances and your mindset.

Open a high-yield savings account to get the best return on your money. Your initial savings can go toward building an emergency fund. After that, you can start contributing to savings for big purchases and retirement.

Make your money work for you

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Earn Extra Money

Cutting expenses will only do so much when you are in a deep financial hole. You also need to figure out a way to boost your income.

Luckily, there are numerous side gigs and part-time jobs that let you earn decent money outside of your full-time job. Use the extra money to pay down debt, build savings and get current on all of your bills.

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Should You Open a New Bank Account Just for the Bonus?

Published on June 23, 2024

By: Ashley Maready

Writer and Editor

• You can sometimes get a chunk of money for opening a new savings or checking account.
• But opening and closing bank accounts frequently for the bonus can result in black marks on your ChexSystems report.
• New account bonuses often involve work on your part (and paying taxes on that cash), so it's a better idea to open a new bank account to keep for the long term.

Check out our pick for the best cash back credit card of 2024

While welcome bonuses on credit cards are more common (and discussed more often), you can sometimes also get a chunk of money when you open a new bank account. Let's say you can get $300 to open a new checking account. You should jump on that opportunity just for the sake of it, right? Well, no. And here's why.

A new bank account should be a longer-term commitment

You'll also have to get used to using a new bank's website and mobile app to manage your finances. You probably don't want to go through this whole process all that often.

Our Picks for the Best High-Yield Savings Accounts of 2024

Similarly, if you're "churning" bank accounts (opening new ones, getting the bonus, then closing the account), that behavior will show up there, too. And a bad ChexSystems report can make it more difficult for you to open accounts in the future. According to ChexSystems, it keeps a record of closed bank accounts for five years -- so that's a solid chunk of time you could be negatively impacted by that information.

Earning bank bonuses requires some work

It isn't always easy to qualify for bank bonuses -- many require you to jump through multiple hoops. You often have to set up direct deposits and arrange to have a certain amount of money hit the new account within a certain period of time. You might also have to complete a set number of qualifying transactions within that time, such as making debit card purchases from a checking account .

You might also need to maintain a minimum balance to earn the reward. If it's a checking account, that might mean losing out on interest income elsewhere (such as in a high-yield savings account). If we're talking about a balance of several thousand dollars, that's not an insignificant amount.

Bear in mind that you'll have to pay income taxes on any bonus cash you get. Plus, if the new account has maintenance fees, that'll eat into your bonus, too. Whenever you open a new account (whether it has a bonus or not), be sure to read all the fine print. Even accounts that have monthly fees often offer ways to get the fee waived, such as by receiving direct deposits or maintaining a certain balance.

New account bonuses can certainly be a sweet deal, and if you're seeking a new banking relationship anyway, it's worth exploring your options to make some cash on the deal. A great place to start looking is our list of the best bank account bonuses available right now. But I don't think it's worth opening a new account just for the bonus. Focus on finding the right account to meet your long-term needs instead.

These savings accounts are FDIC insured and could earn you 11x your bank

Many people are missing out on guaranteed returns as their money languishes in a big bank savings account earning next to no interest. Our picks of the best online savings accounts could earn you 11x the national average savings account rate. Click here to uncover the best-in-class accounts that landed a spot on our short list of the best savings accounts for 2024.

Two of our top online savings account picks:

Our Research Expert

Ashley Maready changed careers from museum operations and management to writing and editing in 2021. She has a passion for teaching others about better living through improving your finances.

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