What do I need to open a business bank account? Full guide

Business bank accounts come in many forms. These accounts can offer perks to business owners, such as introductory offers and interest rates.

They also help you consolidate your company’s funds.

To open a business account, you will need some documents to hand. Read on to find out what you need to set up a business account for your company.

Discover the Wise Business account

What do I need to open a business bank account?

Opening a business bank account should be straightforward, provided you have the right documents.

Setting up a business bank account shouldn’t be much more difficult than creating a personal account.

Any type of company can set up a business bank account, although the requirements may vary.

What documents do I need to open a business bank account?

• Employer Identification Number (EIN)

The EIN is like a social security number for your business. It functions as a form of federal tax ID, and you can apply for it free once you’ve registered your business. You can also use your Social Security number (SSN), if you're a sole proprietorship.¹

• State-issued identification

A state tax ID number is sometimes necessary to set up a business bank account, too. The process to get one is similar to the federal tax ID, but may vary according to the state.

• Business formation documents

These documents include Certificates of Authority, Certificates of Formation, and operating agreements.

• Ownership agreements

These documents detail how the business will be run among its owners or shareholders.

• Business license²

A business license is issued to companies that are regulated by federal agencies. These include those in the industries of agriculture, aviation, and logistics.

• Certificate of Assumed Name

If your business uses a trading name, then you’ll have to present a certificate of Assumed Name to prove it.

• Monthly credit card revenue

Some banks will need to see proof of earnings, so credit card statements may be necessary.

What documents are needed to open a bank account for an LLC?

If you own an LLC, these are the requirements to open a business bank account:

• Business license
• EIN
• LLC operating agreement
• Any Articles of Organization
• Certificate of formation
• Certificate of assumed name
• Fictitious name certificate

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

No, you don’t need an LLC to qualify for a business bank account.

Sole proprietors can also set up business bank accounts to separate their business from their personal funds.

How much do you need to open a business bank account?

The answer to this question depends on the bank, as some require an opening deposit while others don’t.

For example, you can set up a business account with Wells Fargo with a minimum opening deposit of $25.³

Navy Federal, which requires users to be business members of the Navy Federal Credit Union, asks for a minimum opening deposit of $250.⁴

There’s another category of banks, like Chase Bank, which require no opening deposit but a monthly fee instead. Chase Bank charges a $15 monthly fee if your minimum daily balance is less than $2000.⁵

You can also choose a Money Services Business (MSB) provider, such as Wise. Registering a Wise Business account is free in the US, and there is no opening or minimum deposit. You also have the option to add international account details for a one-time fee.

What types of business bank account are there?

There are three main types of business accounts you’ll come across, which are as follows.

• Business checking account - the checking account is a flexible account with few restrictions. It allows you to withdraw, make wire transfers, and more.

• Business savings account - the savings account is best for operating profits, as it can accrue interest on money earned.

• Business merchant account - the merchant account is best for small businesses dealing exclusively with debit and credit card transactions.

Reasons to open a business bank account

The main reason to open a business bank account is to keep your business finances separate from personal funds. The last thing you want is to be on the end of a lawsuit that drags your personal finances into proceedings.

Yet this isn’t the only reason to consider setting up a business account.

It’s much easier to stay on top of your tax obligations when you have an account for just your business earnings.

It’s also possible to accept credit and debit card transactions through a business account, which is something you can’t do with a personal account.

What to consider when opening a business bank account

There are several key factors to consider when opening a business bank account.

Fees - Consider fees before you choose a business account. Fees can be triggered by exceeding a certain number of transactions per month, or taken as a form of monthly maintenance.

Services - Check what services are available with the account, such as mobile app integration, fund transfers between accounts, and bill payments.

Introductory offers - Some banks offer sign-up bonuses for first-time users. These could include anything from a free month to reward points.

Interest rates - If you have earnings you want to accrue interest on, you should look for a savings account with the highest interest rate.

International transaction fees - International wire transfer fees can be expensive. This is something to consider if you do business globally. A payment service, such as Wise Business, can save you money.

Open a Wise Business account online

Wise offers a stress-free way to manage your international business finances through the Wise Business account. Skip the queues and verify your business online in a few simple steps.

Register online today

Once your account is set up, you can pay a one-off fee for international bank details. For example, you can have a UK account number and sort code, even as a US citizen. As such, UK customers can pay you with ease, and all your currencies can be stored in one account.

You won’t need to open several costly international accounts to manage international payments - hooray!

All sources checked November 5, 2021.