If you recently started a business and you’re now sending and receiving payments, it’s time to open a business bank account. A business bank account can help you track expenses, manage invoicing and file taxes more efficiently.

More importantly, a business bank account can provide protections a personal bank account can’t, including limited personal financial liability and merchant protection for your customers. It can also help you establish business credit for future borrowing.

Here are the steps to open a business bank account, plus tips on how to choose a business bank account that meets your needs.

How To Open a Business Bank Account

The requirements to open a business bank account are similar across different types of financial institutions. Here are the basic steps.

1. Get an EIN

If you haven’t already, you’ll need to get an official IRS EIN (Employer Identification Number). Also known as a tax ID number, an EIN is a unique number assigned to your business that’s used for tax reporting purposes.

2. Have Your Documents Ready

Have any required documents, such as a government-issued photo ID or business license, ready before you go into a bank or apply online. Commonly required documents are explained below.

3. Apply in person or online

Depending on the financial institution, you can either bring your documents into a branch or open an account online by uploading your documents. Many accounts will also require an opening deposit, which you can often pay by check, credit/debit card or electronic transfer from another bank account.

What Documents Do I Need To Open a Business Bank Account?

The documents you need to open a business bank account will depend on the type of business you operate. At a minimum, all business owners need to provide the following:

• Personal identification in the form of a government-issued photo ID
• Employer Identification Number (EIN) or a Social Security number if you’re a sole proprietor
• Business license (business name registration certificate or articles of incorporation)
• Business legal name and DBA (Doing Business As) name

And, depending on the type of business, be prepared to provide the following.

• Partnership: Partnership agreement and state certificate of partnership
• Corporation: Corporate bylaws
• LLC: LLC operating agreement

Types of Business Bank Accounts

There are four main types of business bank accounts. Here’s a breakdown of each type and what it’s best for.

Business Checking Account

• Best for: Everyday use like sending and receiving payments
• Benefits: Separation of finances, expense and income tracking, multiple signers
• Watch out for: Account fees, transaction limits, ATM availability

Business Savings Account

• Best for: Storing short- and medium-term savings
• Benefits: Can earn interest, FDIC insurance up to $250,000
• Watch out for: Account fees, changing rates

Business Credit Card Account

• Best for: Spending flexibility
• Benefits: Increase working capital, build credit and earn rewards
• Watch out for: Interest charges, credit score impact, accumulating debt

Business Merchant Account

• Best for: Supporting debit and credit card sales
• Benefits: Serve more customers, Bundle with other services
• Watch out for: Transaction fees, other fees

How To Find the Best Business Bank Accounts

The best business bank accounts offer low fees and a range of features to help you manage your business. Here are some factors to keep in mind as you narrow down your options.

• Monthly fees. Business bank account fees can range anywhere from $8 to $30 a month. You can often avoid these fees by maintaining a minimum balance in your account, but some of the best online banks offer free business bank accounts.
• Competitive APYs. Business savings accounts can be a smart place to stash cash for future expenses while earning a competitive interest rate. Here are some of the best business savings accounts of 2023.
• Monthly transaction limits. Business bank accounts may allow up to 500 transactions per month before a fee is applied. Consider how many transactions you’re likely to conduct in a given month when choosing an account.
• Free wire transfers and stop payments. With domestic wires costing up to $30 per transaction and foreign transfers costing around $50, an account with free wire transfers could save you a lot—even if you pay a monthly fee.
• Bundled accounts. Some banks offer bundled accounts, which can help you save money by bundling your business checking with a business savings account, IRA or merchant services account.
• Account features. Most banks allow you to export data to accounting programs like QuickBooks. But some go further, letting you automate recurring payments and payroll, track tax-deductible expenses or harness advanced search capabilities.
• Rewards and perks. Many banks offer competitive business credit cards with perks like cash back, loyalty points and travel protections, so you can make the most of your business spending.
• Customer service. As a business, it’s important to be able to access customer service when you need it. Some banks have dedicated specialists that focus exclusively on business banking needs.
• Room for expansion. Consider all the services a bank offers that could become important to you down the road, including merchant or treasury services, business loans, credit cards and lines of credit.
• Deposit insurance. If you have multiple business accounts, make sure you have enough FDIC insurance across your different accounts. The FDIC provides up to $250,000 in insurance per depositor, per bank, for each account ownership category, in the event of a bank failure. Credit unions have similar coverage through the National Credit Union Administration (NCUA).