Starting a new business can feel overwhelming, especially when handling your finances. Setting up a business bank account might seem complicated with all the paperwork and options, leaving many new entrepreneurs stressed.

However, choosing the right bank can be easy. While the wrong account could lead to headaches and unnecessary costs, the proper preparation makes the process painless.

This guide will cover everything you need to know to open a business bank account without a hitch.

Table of Contents

• What You Need Before You Apply
• How to Open a Business Bank Account
• Best Business Bank Account Options 
• What You Want In A Business Account
• Why You Need A Business Bank Account
• Is a Business Bank Account Required

What You Need Before You Apply

Before opening a business bank account, there are a few critical steps to ensure your business is legally structured and set up for financial success. Here’s the process, step by step:

1. Form Your Business Structure (LLC or Inc.)

The first step is to decide on and legally form your business entity, such as a Limited Liability Company (LLC) or Corporation (Inc.). This involves filing your Articles of Organization for an LLC or Articles of Incorporation for a corporation with your state.

⌁Why It Matters

• Legal Protection: Forming an LLC or Corporation legally separates your personal assets from your business, offering personal liability protection. If your company is sued or faces financial trouble, your personal assets (house, car, savings) are typically protected.
• Professionalism: Having a formal business structure shows that you’re serious about your business, which adds credibility when dealing with customers, partners, or investors.
• Business Identity: The LLC or corporation allows your business to operate under its own legal name, which is necessary when conducting transactions, contracts, and filing taxes.

⌁How To Get It

• For an LLC: File Articles of Organization with your state’s business division (usually the Secretary of State). You can do this online through your state’s website or by mail. The process varies slightly by state, but generally, it involves choosing a business name, selecting a registered agent, and paying a filing fee.
• For a Corporation (Inc.): File Articles of Incorporation with your state, which requires you to name the corporation, select directors, issue stock, and pay a filing fee. Like LLC formation, this can be done online or by mail.

2. Get an Employer Identification Number (EIN)

Once your business is legally formed, the next step is to get an Employer Identification Number (EIN) from the IRS. An EIN is like a Social Security Number for your business — it’s used for tax purposes and is necessary for various business activities, such as hiring employees.

⌁Why It Matters

• Tax Purposes: You’ll need an EIN to file taxes for your business. It ensures your business is recognized by the IRS as a separate entity from you personally.
• Hiring Employees: If you plan to hire employees or contractors, the EIN is essential for reporting wages and withholding taxes.
• Opening a Business Bank Account: Banks require an EIN to open a business account, especially for LLCs and corporations. It acts as your business’s identification for financial transactions.

⌁How To Get It

• You can apply for an EIN directly through the IRS website for free. The online application is the fastest way to obtain your EIN, and you’ll receive it immediately after completing the form. You can also apply by mail or fax using IRS Form SS-4, but the process will take longer (up to 4-5 weeks).

3. Open a Business Bank Account

With your business structure in place and your EIN in hand, you’re ready to open a business bank account. A dedicated bank account for your business is critical for keeping your personal and business finances separate.

⌁Why It Matters

• Separate Finances: A business bank account keeps your personal and business finances distinct, which is important for legal protection, easier bookkeeping, and tax filing.
• Professionalism: Clients and vendors will make payments to your business name rather than your personal name, which adds credibility and smooths transactions.
• Building Business Credit: A business bank account is the first step toward building a credit profile for your business, which can help you secure loans or lines of credit.

⌁How To Get It

• We’ll discuss the detailed process for opening a business bank account in the next section, but generally, you’ll need to provide your EIN, your business formation documents (such as Articles of Organization or Incorporation), and an initial deposit to your chosen bank.

How to Open a Business Bank Account Step-by-Step

Opening a business bank account involves more than just showing up at a bank or signing up online. Follow these seven steps to make this process as painless as possible:

Step #1: Assess Your Business Needs

Before opening a business bank account, evaluating your financial needs and how your business operates is important. You need to ask yourself the following three questions:

1. Do I need a checking or savings account (or both)?

A checking account is necessary for day-to-day transactions, while a savings account helps store funds for future goals, emergencies, and earning interest on idle cash. Having both may offer better financial management options for your business.

2. What features do I need (e.g., payroll, invoicing, lines of credit)?

Certain features, such as payroll processing, invoicing, or access to a line of credit, can streamline your operations and help with business growth. Understanding which features your business needs will help you select the right bank that offers those services.

3. How often will I be making deposits or transfers?

Some accounts have transaction limits or fees for frequent transfers or deposits. If your business has high transaction volumes, choosing an account with fewer restrictions or no fees for frequent transactions will prevent unnecessary charges and disruptions.

Step #2: Research Banks & Evaluate Options

Once you understand your business needs, it’s time to compare different banking options. Not all banks offer the same services or fees, so thorough research is essential to find the best fit for your business.

Compare Regional, National, & Online banks

Each type of bank has its pros and cons. Regional banks may offer more personalized service, while national banks have more branches and features. Online banks often have lower fees and better tech solutions but need physical locations. Evaluating these options helps you choose a bank that aligns with your preferences and operational needs.

Talk To Other Business Owners 

Fellow business owners can provide firsthand insights about their banking experiences, such as customer service quality, fees, and useful features. Learning from their experiences helps you make a more informed decision and avoid potential pitfalls.

Research & Read Online Reviews

Checking online reviews, comparing fees, and exploring the features offered by different banks can give you a comprehensive view of what’s available. This research ensures you don’t miss out on better options that could save you money or provide essential services.

Watch out for affiliate sites like Nerdwallet and Forbes. They get paid an affiliate commission to rank banks, which could make them biased.

⌁Step #3: Gather Required Documents

Items You Need:

• Personal ID (Driver’s license or passport)
• EIN or SSN (for sole proprietors)
• Articles of incorporation/organization (for LLCs or corporations)
• Business license (if applicable in your area)
• Proof of business address (utility bill, lease, etc.)
• Initial deposit (varies by bank)
• Signer information (if there are multiple authorized users)

Step #4: Apply In-Person or Online

Visit your chosen bank’s website or apply in person with all the necessary documents.

Step #5: Set Up Online Banking

• Register for online banking and download the mobile app.
• Link your bank account to accounting software, if needed.

Step #6: Order Checks & Debit Cards

• Order checks early to avoid delays.
• Get debit and credit cards for yourself and any authorized team members.

Step #7: Inform Clients & Vendors

• Update automated payments and notify clients of your new banking details.

Best Business Bank Account Options for First-Time Entrepreneurs in 2024

Finding the right business bank account can have a big impact on how smoothly you run your business and manage your money. For first-time entrepreneurs, we’ve narrowed down the top 10 options that stand out for their low fees, simplicity, and features tailored to solo entrepreneurs or small businesses. 

These accounts offer easy online banking, minimal fees, and the tools you need to manage your small business efficiently.

Top 10 Best Business Bank Accounts of 2024

1. Bluevine Business Checking
2. Novo Business Banking
3. Found Business Banking
4. Lili Business Banking
5. NorthOne Business Banking
6. Axos Bank Basic Business Checking
7. Chase Business Complete
8. Capital One Business Banking
9. Relay Business Checking
10. Mercury Business Banking

1. Bluevine Business Checking

Offers no monthly fees and 2% interest on balances. Ideal for tech-savvy entrepreneurs, with integrations for accounting tools and unlimited transactions.

• Ideal for: More tech-savvy business owners comfortable with an online-only bank seeking high interest on balances.
• Introductory Offer: Earn $300 when you open a new business checking account and meet specific criteria.
• Key Features:
  • No monthly fees or minimum balance required.
  • 2% interest on balances up to $250,000.
  • Free transactions at 37,000+ ATMs nationwide.
  • Unlimited transactions with no fees for incoming wires or ACH payments.
  • Integrations with accounting tools like QuickBooks and Expensify.

2. Novo Business Banking

A fee-free, online business account with integrations for payment platforms and tools like Stripe and QuickBooks. Ideal for freelancers and small businesses.

• Ideal for: Freelancers, solopreneurs, and small business owners looking for a simple, online banking experience.
• Introductory Offer: $5,000 in waived Stripe processing fees.
• Key Features:
  • No monthly fees or minimum balance required.
  • Free ACH transfers, mailed checks, and incoming wire transfers.
  • Refunds at all ATMs.
  • Integrates with business tools like Stripe, QuickBooks, Xero, and Shopify.
  • User-friendly mobile app.

3. Found Business Banking

Built for self-employed individuals, Found combines banking with tax and accounting tools, offering no fees or balance requirements.

• Ideal for: Freelancers, consultants, and independent contractors.
• Key Features:
  • Specifically designed for the self-employed.
  • No monthly fees or minimum balance.
  • Integrated tax and accounting tools.

4. Lili Business Banking

Designed for freelancers, Lili offers no-fee banking with integrated tax tools and overdraft protection.

• Ideal for: Freelancers and gig workers needing banking, tax, and accounting in one platform.
• Key Features:
  • No monthly fees or minimum balance.
  • Built-in tax and expense management tools.
  • No-fee overdraft protection up to $200.

5. NorthOne Business Banking

A fully digital bank with no balance requirements and robust integrations for accounting software. Offers unlimited free deposits and payments.

• Ideal for: First-time entrepreneurs who want a tech-friendly banking experience with low fees.
• Monthly Fee: $10 per month.
• Key Features:
  • Fully digital bank account with a mobile app.
  • No minimum balance required.
  • Integrates with accounting tools like QuickBooks and Stripe.
  • Unlimited free deposits, payments, and transfers.

6. Axos Bank Basic Business Checking

A digital-first bank offering no monthly maintenance fees and unlimited ATM reimbursements. Ideal for startups needing simple banking with no hidden fees.

• Ideal for: Startups seeking a fully digital banking experience with no hidden fees.
• Introductory Offer: $200 sign-up bonus for new accounts.
• Key Features:
  • No monthly maintenance fee.
  • Unlimited ATM fee reimbursements.
  • Free bill pay and mobile check deposits.

7. Chase Business Complete

Offers access to thousands of branches and no monthly fee with a minimum balance. Great for businesses needing a range of services, including payroll and invoicing.

• Ideal for: Small businesses that need a wide range of financial services and products.
• Introductory Offer: $300 sign-up bonus for new account owners.
• Key Features:
  • No monthly fee with a $2,000 daily balance.
  • Unlimited electronic deposits, including ACH and Chase QuickDeposit.
  • Unlimited internal transfers.
  • Access to 4,700+ branches nationwide.
  • Highly reputable online banking platform and mobile app.

8. Capital One Business Banking

No monthly fees with a $2,000 balance, access to 70,000 ATMs, and strong online and mobile banking tools. Ideal for businesses with high transaction needs.

• Ideal for: Businesses seeking unlimited transactions and a wide range of financial products.
• Introductory Offer: Earn 4.10% interest on savings for the first six months when you open a business savings account.
• Key Features:
  • No monthly fee with a $2,000 balance.
  • No fees on mobile deposits, ACH payments, and online bill pay.
  • No fees on ATM withdrawals at 70,000+ ATMs.
  • Free online and mobile banking with mobile check deposits.

9. Relay Business Checking

Offers fee-free banking with built-in budgeting tools, supporting up to 20 checking accounts. Ideal for small businesses needing organized financial management.

• Ideal for: Small businesses that need a simple and organized banking solution.
• Key Features:
  • No fees or minimum balance required.
  • Built-in budgeting and financial management tools.
  • Supports up to 20 checking accounts.

10. Mercury Business Banking

Focused on helping small, scrappy startups manage their money efficiently without traditional bank complexities.

• Ideal for: Startups looking for a modern, online-only banking solution with no monthly fees and powerful tools for managing finances.
• Key Features:
  • No monthly fees or minimum balances.
  • Free domestic and international wires.
  • Integrates with financial tools like QuickBooks.

What You Want In A Business Bank Account

When evaluating different business bank account options, it’s important to consider several key factors to ensure you’re getting the best fit for your needs.

✓ Low Fees

Startups often need to keep costs down, so look for accounts with low or no monthly fees. To avoid surprises, be sure to check for hidden fees like minimum balance requirements, wire transfer fees, overdraft fees, or ATM charges.

✓ Interest Rates

If you plan to keep a significant balance, look for business accounts that offer decent interest rates—though this is more common with savings accounts than checking accounts.

✓ Transaction Limits

If your business handles a high volume of transactions, choose an account with higher limits. Pay attention to daily and monthly caps on deposits, withdrawals, and transfers, as exceeding them can lead to extra fees.

✓ Introductory Offers

Many banks offer bonuses or waived fees for new customers. These promotions can be a great way to save money early on, but make sure to understand what happens once the promotional period ends.

✓ Web and Mobile Features

In 2024, seamless online and mobile banking is essential. Ensure the bank offers a user-friendly mobile app and website with features like mobile deposits, transaction tracking, and account alerts.

✓ Customer Service

Good customer support is critical, especially when you need quick assistance. Look for a bank with multiple support channels—phone, email, and live chat—and make sure their hours suit your schedule.

✓ Reputation & Reliability

Choose a bank that is reliable and secure. Ask fellow business owners about their experiences, and research the bank’s stability by checking news or reviews for any security breaches or service outages.

Why You Need A Business Bank Account

A business bank account goes beyond managing money—it plays a key role in protecting personal assets, boosting professionalism, and streamlining financial processes. 

Let’s break down why it’s crucial to have one.

1. Legal Separation of Personal & Business Finances

A business bank account is essential for keeping your personal and business finances separate, which is especially important for LLCs and corporations. Mixing finances can expose your personal assets to legal risks. Additionally, it simplifies tax preparation, making it easier to track expenses and prepare accurate reports.

⌁Why It Matters

If you run your business through a personal account, you risk losing the liability protection your business entity provides, making your personal assets vulnerable in the event of legal action.

2. Professional Appearance

Having a business bank account enhances your business’s credibility. Clients and vendors can pay your business directly, rather than sending payments to your personal account, which adds a layer of professionalism. This also reinforces brand identity—your business name becomes more recognizable, increasing word-of-mouth referrals.

⌁Why It Matters

Accepting payments in your business name makes your company look more legitimate and trustworthy. It’s also easier to manage transactions when they are routed through one dedicated account.

3. Business Management Tools

Many business bank accounts come with a suite of management tools designed to help you run your business more efficiently. These can include payroll processing, invoicing, expense tracking, and access to business credit lines. Some accounts integrate seamlessly with accounting software, making bookkeeping easier.

⌁Why It Matters

Using these tools saves time and effort by automating key financial tasks, giving you more time to focus on growing your business.

4. Builds Business Credit

A dedicated business bank account is the foundation for building a strong business credit score, also known as a commercial credit score. A good score can help you secure loans, access better financing options, and build relationships with vendors.

⌁Why It Matters

Just as personal credit is important for securing loans, your business credit score will determine how easily you can access capital for expansion or cover operational costs.

Is a Business Bank Account Required?

Whether you need a business bank account depends on your business structure, but setting one up has significant advantages. Here’s a breakdown based on different business types:

Sole Proprietorship

As a sole proprietor, you can legally use your personal bank account for business transactions. However, using a business account helps keep your finances organized and professional. If you’re operating under a DBA (Doing Business As), a business bank account may be required to cash checks under your business name.

⌁Why It’s A Good Idea

• Keeps personal and business finances separate, which is crucial for accurate tax reporting.
• Enhances your professional image when dealing with clients and vendors.

Limited Liability Company (LLC) 

Although it’s not legally required to open a business bank account for an LLC, it’s strongly recommended. LLCs offer liability protection, but mixing business and personal finances can weaken that protection. A dedicated business bank account helps maintain clear separation between you and your business, which can protect you in the event of legal issues.

⌁Why It’s Necessary

• Ensures liability protection by keeping personal and business funds separate.
• Simplifies tax filings and accounting.

Corporation

For corporations, a business bank account is a legal requirement. Corporations are separate legal entities, and strict financial management rules apply. You’ll need a business account to handle day-to-day transactions, maintain financial records, and meet compliance standards.

⌁Why It’s Required

• Corporations must maintain separate financial records to protect shareholders and meet legal requirements.
• A business bank account ensures transparency and legal compliance.

Bottom Line

Getting a business bank account is always a good idea, even if you’re not legally required to do so. Whether you’re a sole proprietor, LLC, or corporation, a separate account makes it easier to manage your finances, track expenses, and scale your business professionally.