How to open a business bank account in 5 steps

Small businesses of all sizes typically need to open a business bank account to keep personal and business assets separate. Business Checking Account We help every entrepreneur manage their company's finances, streamline invoicing, and simplify tax filing. Applying takes just a few minutes once you gather the required information. What you need to open a business account in advance.

Here's how to open a business bank account:

1. Choose a Business Checking Account

Most businesses should start their banking journey with a business checking account. If your company is small, that may be enough. But as your business grows, your banking will become more complicated. You may need multiple types of accounts with multiple banks. (Learn more about business checking accounts.) Under.

A lot Free Business Checking AccountMany don't have minimum balance requirements. When deciding where to open a business account, consider which of the following factors are most important to your business:

• Minimum Balance Requirement.

• Includes commission-free trading.

• ATM access (withdrawals and deposits).

• Wiring, money transfer and payment functions.

• Incidental charges (stop payments, insufficient balances, overdrafts).

• Additional features like bill paying, invoicing, accounting software integration, and other business tool integrations.

In addition to the personal service and established ATM networks, brick-and-mortar banks typically offer other financial products, such as: business credit card and Small Business LoansHowever, they usually have monthly transaction limits and higher fees.

Online Business Bank Account They're more likely to offer unlimited transactions and reduced fees, but you won't be able to visit a branch to get help. And many of these Neobanks — is not a bank itself, but a financial technology company that partners with banks to store funds in accounts insured by the Federal Deposit Insurance Corporation (FDIC).

No matter where you bank, make sure your funds are insured up to the FDIC limits of $250,000 per depositor, per institution.

2. Collect the necessary documents and apply

Most banks today, including those with brick-and-mortar locations, allow you to fill out an account application online. However, there are a few banks that require you to come into a branch to complete the process. At these financial institutions, you can also start the process in person.

Applying in a branch may take longer, but it's convenient if you have questions for a business banker along the way. Online applications are usually approved quickly, but in some cases you may need to submit additional documents.

What you need to submit with your application varies, but at a minimum you will need to submit the following:

• Personal and business information, such as your Social Security number and/or Employer Identification Number (EIN).

• Business formation documents.

• Any organizational or partnership agreement.

3. Fund your newly opened business account

Most business bank accounts can be opened with $0, but some business checking accounts require an opening deposit, usually ranging from $25 to $100. Business Savings Account Some accounts may have higher deposit requirements, ranging from $1,000 to $25,000, but there are still many accounts that allow you to get started with just $0.

Even with business accounts that you can open without any money, you must deposit funds into the account within a certain time period or the financial institution will close the account as inactive.

Have you made a selection? Business bank accounts offering promotionsNow is a good time to check the terms. Many of these offers require you to deposit a certain amount immediately and maintain an average balance for several months.

4. Set up a business checking account

Once your account is open and funded, it's time to set up your account. First, download your bank's mobile app and sign up or log in to their online banking platform.

Next, open a new bank account Business Accounting Software Other relevant business tools — Many business bank accounts offer direct integrations with popular software and apps, such as QuickBooks, Xero, FreshBooks, Shopify, and Gusto.

You can also add authorized users and set appropriate permissions, which may be important depending on your business setup. For example, Open a business bank account for your LLCMultiple members of your organization may need access, and you can also set up recurring payments and account alerts.

Your main business debit card will be shipped automatically and will usually arrive within 7-10 business days. You can order checks and request additional employee debit cards if your bank offers these options.

5. Consider other types of business bank accounts

There are several other types of banks Business Account Each has its own purpose and benefits, such as a business savings account or a merchant services account.

Not every business needs these accounts right away. Payment Processing Company For example, instead of opening your own merchant service account.

But as your business grows, you'll probably need additional accounts. That could be for operational efficiencies, like putting your paychecks in a dedicated account. Or maybe you just want to take advantage of higher interest rates. Business Money Market Account If you're saving for emergencies or long-term goals like business expansion, building a cash reserve may make sense.