How to Open a Business Bank Account
Opening a business bank account is a simple process.
In this How to Open a Business Bank Account guide, we take a look at what you will need in order to open a business bank account, examine what the best business banking options are in 2024, and consider the benefits of opening a business account.
Recommended Service: Relay is a no-fee, online banking and money management platform that lets you spend, save and plan more efficiently.
What You Will Need
Opening a business bank account requires three primary types of documentation:
- Personal Identification: Any form of government-issued photo identification (e.g., driver's license, passport, etc.). Some banks may require a secondary form of identification (e.g., utility bill, credit/debit card, etc.).
- Tax Identification Number: Multi-member businesses must provide their Employment Identification Number (EIN). Sole proprietorships and single-member LLCs may provide their Social Security number (SSN) or Individual Taxpayer Identification Number for non-US citizens (ITIN) instead of an EIN.
- Documentation of Business Registration and Compliance: Unless you’re a sole proprietor, you’ll need to bring your business formation documents (e.g., Certificate of Formation, Articles of Incorporation, etc.). Businesses that require licenses or permits should bring proof of these as well.
Some banks also require the following documents:
- Operating/partnership agreement: Depending on your business structure, you may also need to provide your bank with a written operating agreement or partnership agreement.
- Assumed Name Certificate: If your business uses a “doing business as” (DBA) name, your bank may need to have your Assumed Name Certificate or equivalent document (e.g., Trade Name Certificate, Fictitious Business Name Statement, etc.) on file.
- Business license certificates: If applicable
Finding the Right Bank Service
There are several premium business banking and money management platforms that you can use as a small business.
Distinguishing between the top choices can be a time-consuming task.
Below we have provided a small summary of our review of the best small business bank accounts in 2024:
Relay: Best Overall Option
Pros
- No account minimums
- High security — accounts are FDIC insured up to $250,000, cards are covered by Mastercard’s Zero Liability Policy, and two-factor authentication for logins is provided
- As an accountant, you can log in to multiple clients’ Relay accounts by using one set of credentials. This means you do not need to share client passwords and 2FA codes.
- Extremely scalable — very high limits on wires, direct deposits, and ACH transfers
- Available to foreign owners of US businesses
- No account fee option
- No withdrawal fees
- No overdraft fees
- 4.5 stars on Trustpilot
- Free Relay Demo offered with live Q&A
- Relay Partner Program, with which you can earn very generous revenue share and discounts by adding clients (e.g., 17% revenue share by adding 10 clients, etc.)
- Collect payments from PayPal, Stripe, Square, and much more
Cons
- Not as many integrations and free rewards as other providers
- Relatively high monthly fee, although this is made up through the no-fee financial transactions
Relay simplifies cashflow management with unparalleled clarity into operating expenses, cash flow and accounts payable, making it the best overall.
Brex: Ideal for Venture-Backed Startups
Pros
- Expedited payments for ecommerce platforms, including Amazon, PayPal, Shopify, Square, and Stripe
- High number of third-party integrations: Rippling, Gusto, Expensify, QuickBooks, Xero, Slack, and much more
- Partner perks worth over $150,000
- Up to $100,000 credits via AWS Activate
- 3x rewards on eligible Apple purchases, including hardware purchases
- 40% off your first 12 months of QuickBooks
- 50% discount every time you ship with UPS
- Up to 150% in Google Ads
- FDIC insured up to $250,000 per account
- No transaction, account, or international fees
- No monthly fee
- Business credit cards available
- Available to foreign owners of US businesses
- No minimum deposit
Cons
- Needs a pre-existing business bank account — you must connect at least one Linked Account to your Brex account (these are required to be business bank accounts)
- Must be in business for six months and be venture-backed to be considered for an account
- Cannot be used to withdraw money from an ATM
- Cannot deposit cash into your Brex account
Brex lets you move money fast, when paying vendors, running payroll, or sending payments overseas, with zero fees.
Novo: Optimum for Ecommerce Businesses
Pros
- Very secure — includes EMV chip, bank-grade encryption, and a disposable virtual card
- FDIC insured up to $250,000
- Accounting software integrations
- $20,000 in fee-free card processing with Stripe
- 6% cashback on all Booking.com trips when you pay with your Novo debit card
- $3,000 in Google Cloud credits
- 100% discount on the first three months of any Gusto package
- 40% discount on the first six months of any QuickBooks Online package
- 30% discount off first year HubSpot subscription, as well as 15% for all the following years
- $25,000 in segment credit for the first two years
- Free six months on any Zendesk Suite licenses
- $150 in Snapchat ads credits
- Online and mobile banking check deposits
- Merchant services account
Cons
- Only US residents are eligible for Novo's business accounts
- Limited industries — if you work with cryptocurrencies, privately-owned ATMs, or gambling, you will be unable to use Novo
- Minimum balance required to open is $0, but the minimum amount required is $50
- Some Novo Apps' advanced functionalities may incur fees charged by Novo's partners (e.g., Wise integration, etc.)
Novo integrates with third-party financial apps that you use to manage and grow your business, making it optimal for ecommerce.
Chase: Great for In-Person Banking
Pros
- More than 5,000 branch locations and over 17,000 ATMs
- Largest US bank, most assets
- Numerous business bank account types, lots of versatility
- Great mobile app and website
- Several ways to eliminate fees
- 24/7 customer service
- Potentially avoidable monthly fee: For example, the Chase Total Checking account allows users to avoid the $12 monthly fee if they satisfy certain transactional and account-finance requirements
Cons
- Business savings account interest rates are on the lower end
- Premium business checking is expensive — their Platinum Business Checking account costs approximately $95 per month
Chase has the most branches of any bank, making it optimal for in-person banking.
Lili: Best for Freelancers and Microbusinesses
Pros
- Expense management — businesses can categorize different expenses from Lili's online and mobile banking app in real time
- If you deposit money from online platforms into your Lili account, you can get your money up to two days earlier (e.g., Uber, Lyft, Shopify, etc.)
- No minimum balance
- No hidden fees
- Business cashback rewards on everyday purchases
- Highly secure — FDIC insured, real-time transaction notifications, ability to freeze and unfreeze debit cards at any time through your app
- three-minute sign registration
- Can find locations of free withdrawal ATMs within Lili app
- Lili pre-fills your annual 1040 Schedule C form, saving time when you need to file it with your accountant or with the IRS
- No foreign transaction fees
- Very affordable
- Can use Lili debit card internationally anywhere where VISA is accepted
- “Auto-Saving” service
- Invoicing tool to manage your bookkeeping by creating an unlimited amount of invoices through Lili's online and mobile banking app
- Can save and download all invoices as PDF documents directly from Lili mobile app
Cons
- Funding limits can be inconvenient unless you’re a very small business (e.g., $2,000 a month in ACH Inbound, etc.)
- No 24/7 hour support — available Monday through Friday, 9 a.m.–7 p.m. EST
- The business account only available for single-owner LLCs and sole proprietorships
- Foreign Activity: If you move outside of the US or have frequent international transactions, you may be contacted for additional verification of your address. If you “will not be returning to the US, your account may be closed.”
- Does not accept deposits in foreign funds or checks drawn from banks outside the US
- Cannot make deposits at an ATM
- No wire transfers
- No checks
Lili is great for freelancers and independent contractors because it combines banking and accounting services to off-set tax liability.
NorthOne: Good Payment Processing Integrations
Pros
- Can open an account in as little as three minutes
- Email, phone, and live chat support
- FDIC insured up to $250,000 per account
- Secure — includes multi-factor authentication, ability to freeze cards instantly, as well as touch and face ID
- Optimized landing pages to promote businesses
- Access to exclusive promotions and rewards
- Partner and affiliate programs
- Can make deposits from anywhere
- Mastercard debit cards with withdrawals at any MoneyPass ATM in the US
- Activate and freeze debit cards from your phone
Cons
- Needs a US physical address, not applicable to foreign owners of US businesses
- No "free" plan
- Quite expensive — $15 for sending and receiving domestic wires
NorthOne lets you process payments fast with great payment processsing integrations.
Benefits/Advantages of Opening a Business Bank Account
There are several advantages to opening a business bank account in comparison to a personal bank account as a small business:
- Easier access to business loans
- Ability to build business credit
- Increased credibility
- Ability to accept credit card payments
There are other financial benefits to opening a business account. Depending on your bank, you could be offered a variety of banking, tax, and accountancy tools that help you manage your business’s bookkeeping.
Moreover, several online banking and money management platforms now offer discounts and bonuses on a variety of ecommerce and advertising platforms (e.g., expedited payments on Shopify, Google Ads credit, etc.).
If you’re the owner of an incorporated business entity (i.e., C corp, LLC, nonprofit, etc.), it is particularly important that you open a business bank account so that you do not “pierce your corporate veil.”
Piercing the corporate veil is a situation where incorporated entities lose certain legal protections — including limited personal liability for the owners — as a result of not adequately treating their businesses and themselves as two separate financial entities.
Opening a business bank account can safeguard you from piercing your corporate veil because it shows that you have been treating yourself and your business as two separate entities in law by separating your personal and business finances through two separate bank accounts.
Tip: You may be able to protect your personal information by opening a business bank account while using your Employer Identification Number (EIN) rather than your Social Security Number (SSN).
Open a Business Bank Account FAQs
This will depend on the bank in question.
Most business banks will require the following information:
- Personal identification (e.g., passport, ID, etc.)
- Proof of physical address: This can sometimes be the address of your registered agent, but not always. If you are an international applicant, you will want to confirm this with your bank proactively.
- Business documents: These will depend on your business structure but can generally include things like your Articles of Incorporation, Certificate of Formation, Partnership Agreement, etc.).
Some banks may also require you to have a US phone number and/or an Assumed Name Certificate — if your business is registered as a DBA.
A business savings account is — as the name suggests — generally used to “save” money and accumulate interest.
Business savings accounts are usually established to be used as either "emergency" or retirement funds.
On the other hand, business bank accounts are used for the normal, day-to-day expenses that you will face as a business (e.g., equipment purchases, invoice payments, etc.).
Business checking accounts offer several transactional benefits, including the ability to make ACH and wire transfers.
The best business bank account for your business will ultimately depend on your needs.
Having said that, we found that Relay was our favorite money management and online banking platform for the following reasons:
- Low transaction fees
- No monthly maintenance fee option
- Two business checking accounts
- Available to foreign owners of US businesses
- Large range of online discounts and third-party integrations
For more information, see our in-depth review of Relay.
This will depend on the bank you choose to work with.
Some banks impose minimum balance requirements and opening deposit fees, in conjunction with a regular monthly maintenance fee that has to be paid.
On the other hand, certain online banking platforms (e.g., Relay, Brex, Novo, etc.) offer no minimum balance and monthly fee options for small businesses.
You should be able to apply online for most major business banks and business platforms, including:
- Relay
- US bank
- Novo
- Chase
- Brex
- Lili
- NorthOne
You can, but this is not recommended. Using your personal bank account for your business can lead to you losing your incorporated protections (e.g., limited liability under the law, etc.).
