How to Open a Business Bank Account

Written by True Tamplin, BSc, CEPF®

Reviewed by Subject Matter Experts

Updated on September 08, 2023

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Step-By-Step Guide to Opening a Business Bank Account

Research the Right Bank for Business

Identify Business Needs

The first step in opening a business bank account is to identify your business needs. Do you require a simple checking account, or do you need other services such as loans, credit cards, or merchant services?

Do you make many transactions each month, or do you maintain a high balance? Answering these questions can guide you in selecting the right bank.

Compare Different Banks and Their Offerings

Different banks offer varying products, services, and fee structures. Some banks cater to small businesses, while others may focus on larger corporations.

Research and compare different banks in terms of their account types, fees, interest rates, accessibility, customer service, and additional services.

Prepare the Necessary Documentation

Business License

A business license is a mandatory document in the process of opening a business bank account. This proves that your business is legal and has been registered in your state or municipality.

Employer Identification Number (EIN)

An Employer Identification Number (EIN) is like a social security number for your business. Most banks require your EIN to open a business account. Sole proprietors can sometimes use the owner's Social Security number instead.

Ownership Agreements

Banks typically require documentation that identifies the owners of the business and their respective shares. This could be an operating agreement for an LLC or articles of incorporation for a corporation.

Other Required Documents Depending on Business Structure

Other required documents can vary depending on your business structure and the specific bank. For example, partnerships may require a partnership agreement, while a corporation might need a corporate resolution giving the individual opening the account the authority to do so.

Going Through the Account Opening Process

Set an Appointment With the Bank

After gathering all the necessary documents, set an appointment with your chosen bank. Some banks allow businesses to open accounts online, while others may require a face-to-face meeting.

Meet With a Bank Representative

During the meeting, the bank representative will guide you through the account opening process, which includes verifying your documents and discussing the terms and conditions of the account.

Submit the Required Documents

You will be required to submit all your documents for review. The bank might also require additional information about your business, such as its nature, source of funds, etc.

Make the Initial Deposit if Required

Some banks require an initial deposit to open a business bank account. The amount varies across banks and account types.

Understand the Features and Capabilities of a New Business Bank Account

Online Banking

Online banking is a feature that allows you to manage your account anytime, anywhere. You can check balances, transfer funds, pay bills, and more.

Mobile Banking

Mobile banking, an extension of online banking, offers the convenience of managing your account via a mobile device. This feature can be incredibly handy for busy entrepreneurs on the go.

Check and Debit Card Facilities

Business bank accounts usually come with checkbooks and debit cards. These tools allow for easy access to funds and simplify transactions with suppliers, customers, and others.

Merchant Services

Merchant services enable businesses to accept electronic payments like credit and debit cards. If your business engages in transactions with clients who prefer card payments, this service can be invaluable.

Step-By-Step Guide to Opening a Business Bank Account

Tips to Managing a Business Bank Account

Keep Personal and Business Expenses Separate

It's important to maintain a clear boundary between personal and business finances. This simplifies bookkeeping, aids in tax preparation, and protects personal assets from business liabilities.

Regularly Review and Reconcile Account

Frequent review of your account can help spot any irregularities or fraudulent activities early. It's also a good practice to reconcile your bank account with your business's financial records regularly to ensure accuracy.

Understand and Minimize Fees

Business bank accounts often come with various fees. Understanding these fees can help you avoid unnecessary charges. Some banks may waive certain fees if you maintain a minimum balance or meet other criteria.

Take Advantage of Bank Services and Perks

Many banks offer additional services like business credit cards, payroll services, or discounted insurance. Utilizing these perks can help your business save money and run more efficiently.

Tips to Managing a Business Bank Account

Select Additional Business Banking Products

Business Credit Cards

Business credit cards can help manage cash flow and separate personal and business expenses. Some also offer rewards programs that can be beneficial for businesses.

Business Loans and Lines of Credit

Business loans and lines of credit can provide the necessary capital to start or expand your business. Different banks offer various types of business loans with varying interest rates and repayment terms.

Merchant Services

As mentioned earlier, merchant services enable businesses to accept card payments. These services can also provide businesses with the necessary hardware and software to facilitate such transactions.

Treasury and Cash Management Services

Banks often provide treasury and cash management services to help businesses manage their money effectively. These services may include cash flow analysis, investment services, and efficient handling of receivables and payables.

Changing or Closing a Business Bank Account

Reasons for Changing or Closing an Account

Businesses may want to change or close their bank accounts due to high fees, poor service, a change in business needs, or better offerings from another bank.

Process to Closing the Current Account

To close a business bank account, generally, all outstanding checks must clear, any automatic payments or deposits must be switched to a new account, and the account balance must be zeroed out.

Process to Opening a New Business Bank Account

Opening a new business bank account follows the same process outlined above - understanding your needs, researching banks, preparing necessary documents, and going through the account opening process.


Opening a business bank account involves several critical steps. Initially, understanding your business needs, researching different banks and their offerings, and preparing the necessary documents are crucial.

Once your account is open, knowing the features and capabilities of your new account is essential. This includes understanding and utilizing online and mobile banking, check and debit card facilities, and merchant services.

Efficient account management, separation of personal and business expenses, regular account review and reconciliation, and careful understanding of bank fees are pivotal for successful banking.

Additionally, making use of extra services and products such as business credit cards, business loans, merchant services, and treasury services can significantly benefit your business operations.

Lastly, changes in business needs or dissatisfaction with the current bank may necessitate account change or closure. Thus, understanding and following these guidelines will enable smoother and more efficient business banking.

How to Open a Business Bank Account FAQs

About the Author

True Tamplin, BSc, CEPF®

True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.

True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide, a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.

To learn more about True, visit his personal website or view his author profiles on Amazon, Nasdaq and Forbes.

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