What You Need Before You Walk Into a Bank
You will need an Employer Identification Number (EIN) from the IRS, a business license or registration document from your state or local government, and a form of personal identification. If your business is a sole proprietorship, you can often use your Social Security number instead of an EIN, but most banks prefer the EIN. The bank will also ask for your business address and the names and Social Security numbers of anyone with signing authority on the account.
Bring your business formation documents — articles of incorporation for an LLC or corporation, a partnership agreement if you have partners, or your sole proprietorship registration. The bank needs proof that the business actually exists and that you have the right to open an account on its behalf. Some banks will accept a business license alone; others want the full formation paperwork.
Have your personal identification ready: a driver's license, passport, or state ID card. The bank will verify your identity under federal anti-money-laundering rules. If you are opening the account on behalf of someone else or if multiple people will have signing authority, bring ID for each person who will sign.
Key Takeaways
- You need an EIN (or your Social Security number for a sole proprietorship), a business license, and personal ID before you can open an account.
- Different banks have different minimum balance requirements and fee structures, so compare options before choosing where to bank.
- The process usually takes one to three business days once you submit your documents, though some banks offer same-day accounts online.
- You will need to decide whether you want a checking account, savings account, or both, and whether you need merchant services or other business tools.
- Bring original documents or certified copies; banks will not accept photos or scans for initial account opening.
Where to Open Your Account: Banks, Credit Unions, and Online Options
You can open a business account at a traditional bank, a credit union, or an online-only bank. Traditional banks offer in-person service and often have local branches where you can deposit cash and checks. Credit unions typically have lower fees and may offer better rates on savings, but you must be a member and membership is sometimes restricted by location or profession. Online banks have no physical branches but often have the lowest fees and fastest account opening.
Each option has different requirements. A traditional bank may require a minimum opening deposit (often $500 to $2,500) and a minimum balance to avoid monthly fees. Credit unions may have lower minimums but require membership first. Online banks often have no minimum balance and no monthly fees, but you will need to deposit checks by mail or mobile app and cannot deposit cash directly.
Call or visit the bank's website before you go in person. Ask about monthly maintenance fees, per-check fees, ACH transfer fees, and what the minimum balance requirement is. Some banks waive fees if you maintain a certain balance or set up direct deposit. Knowing this ahead of time saves you from opening an account that costs more than you expected.
Documents to Bring and What Happens During the Opening Process
Bring originals or certified copies of your business formation documents. A photocopy or photo on your phone will not work for the initial opening. If you formed an LLC or corporation, bring the articles of incorporation or articles of organization. If you are a sole proprietor, bring your business license or a certificate of assumed name (also called a DBA certificate) if your state requires one. If you have partners, bring the partnership agreement.
The bank will ask you to fill out a signature card or account agreement. This document lists who can sign checks and withdraw money. If only you will have access, you sign alone. If you want a co-owner or employee to have signing authority, they must sign the card too and provide their own ID. The bank will keep this card on file and use it to verify signatures on checks.
The bank will also ask about the nature of your business, your expected monthly deposit volume, and whether you plan to accept credit card payments. This information helps them assess risk and recommend services. Be honest about your expected activity; if you underestimate and then deposit large sums, the bank may freeze the account pending verification.
How Long It Takes and When You Can Start Using the Account
If you open an account in person at a traditional bank, you will usually receive a temporary debit card on the spot and can start using the account within one to three business days. The bank will order your permanent checks and debit card, which arrive by mail in five to ten business days. You can deposit checks and make transfers immediately, but large deposits may be held pending verification.
Online banks often open accounts the same day you submit your information, though you may need to verify your identity by uploading a photo of your ID or answering security questions. Your account number and routing number are available immediately, so you can set up direct deposit or ACH transfers right away. Checks and a debit card arrive by mail within five to seven business days.
Credit unions typically take one to two business days to open an account after you become a member. Membership itself can be instant (online) or take a few days if you apply in person. Once your account is open, you can use it the same day.
Fees and Costs to Watch For
Monthly maintenance fees range from $0 to $30 depending on the bank and account type. Some banks waive the fee if you maintain a minimum balance (often $1,000 to $5,000) or set up direct deposit. Others charge the fee no matter what. Per-check fees are usually $0.10 to $0.50 per check if you write many checks; some accounts include a set number of free checks per month.
ACH transfer fees (electronic transfers to other banks) typically cost $0 to $3 per transfer. Wire transfer fees are higher, usually $15 to $30 outgoing. Overdraft fees can be $25 to $35 per overdraft, and some banks charge multiple overdraft fees per day if you overdraw by a large amount. Returned check fees are similar. Ask the bank whether they offer overdraft protection (linking to a savings account or credit line) to avoid these charges.
Merchant services (accepting credit and debit cards) are separate from the bank account itself. If you plan to take card payments, the bank will quote you a processing rate (usually 1.5% to 3% of each transaction) plus a monthly gateway fee ($10 to $30). These costs add up quickly if you process many small transactions, so compare rates across banks and payment processors.
Special Situations: Sole Proprietors, LLCs, and Corporations
A sole proprietor can open a business account using either an EIN or a Social Security number. If you use your Social Security number, the account will be in your personal name but designated as a business account. If you use an EIN, the account is in the business name. Using an EIN is cleaner for record-keeping and separates your personal and business finances more clearly, but it requires an extra step (applying for the EIN from the IRS). The application is free and takes about ten minutes online at irs.gov.
An LLC or corporation must use an EIN. The bank will require proof of formation (articles of organization or incorporation) and will open the account in the business name. If you are the sole owner of an LLC, you can still use the account for personal expenses if you want (since an LLC is a pass-through entity for tax purposes), but it is cleaner to keep business and personal money separate.
If you have partners or co-owners, all of you can have signing authority on the account, or you can limit it to one or two people. The signature card will list who can sign. If someone leaves the business, you will need to update the signature card and remove their authority. Some banks allow you to do this online; others require you to visit in person or mail in a new card.
After You Open: Setting Up Payroll, Transfers, and Record-Keeping
Once your account is open, set up online banking so you can monitor your balance and make transfers from your computer or phone. Most banks offer this free. Link your business account to your accounting software (QuickBooks, FreshBooks, Wave, or similar) so transactions download automatically and you do not have to enter them by hand.
If you have employees, you will need to set up payroll. Some banks offer payroll services; others do not. If your bank does not, you can use a third-party payroll processor like ADP, Gusto, or Paychex. These services calculate taxes, file forms, and deposit paychecks into employee accounts. Costs range from $30 to $200 per month depending on the number of employees and features you need.
Keep your business account separate from your personal account. Mixing personal and business money makes taxes harder and can create legal problems if your business is sued. If you are a sole proprietor, you can withdraw money for personal use (called a "draw"), but do it through a separate transfer, not by using the business debit card for personal purchases.
What to Do If You Are Denied or If the Bank Asks for More Information
Banks sometimes ask for additional documentation before opening an account. This is normal and usually means they need clarification about your business or want to verify your identity more thoroughly. Common requests include a copy of your business license, a utility bill showing your business address, or a letter from your accountant describing your business. Provide what they ask for within the timeframe they give you.
If a bank denies your account, ask why. Common reasons include a mismatch between your ID and the name on your business formation documents, a history of fraud or unpaid accounts at other banks, or a business type the bank does not serve (some banks avoid certain industries). If the reason is a credit or banking history issue, you may have better luck with a credit union or online bank, which sometimes have more flexible policies.
If you cannot open an account anywhere, consider a second-chance banking program. Some banks and credit unions offer these specifically for people with banking problems in their past. You may face higher fees or lower limits, but you can build a clean history and move to a standard account later.
Frequently Asked Questions
Do I need an EIN if I am a sole proprietor?
No, but most banks prefer it. You can use your Social Security number instead, and the account will still be a business account. Getting an EIN is free and takes ten minutes at irs.gov, and it keeps your personal and business finances more clearly separated for tax purposes.
Can I open a business account online without going to a bank in person?
Yes, if you use an online bank. You upload photos of your ID and business documents, verify your identity through security questions or a video call, and the account opens the same day. Traditional banks usually require an in-person visit, though some offer hybrid options where you start online and finish in a branch.
What if my business address is my home?
That is fine. Use your home address as the business address. The bank may ask for a utility bill or lease showing you live there, but home-based businesses are common and banks accept them. If you want a separate mailing address, you can rent a mailbox at UPS Store or a local mailbox service.
How much money do I need to open an account?
It depends on the bank. Online banks often have no minimum opening deposit. Traditional banks typically require $500 to $2,500. Credit unions vary. Check the bank's website or call before you go in; if you do not have the minimum, try a different bank rather than borrowing money just to open the account.
Can I use a business account for personal expenses?
Legally, yes, especially if you are a sole proprietor or single-member LLC. Practically, it is a bad idea. Mixing personal and business money makes taxes harder and can create problems if your business is sued. Keep them separate and transfer money to yourself through a formal draw or owner distribution.