How to Open a Business Bank Account (Video)

by Joshua Botello

If you have filed for your DBA, EIN and now you look to start selling, there is one crucial but often overlooked item business needs to get: a business bank account. A business bank account is a necessity because it separates your business expenses from personal expenses, allows check processing, and gives you access to financing. I’ll show you what to look for in a business account and what information you need to open one. Most of this research can be done online. So let’s start there and open up our bank account.

Finding a Bank

The first step to getting your business bank account is determining your bank. Most commercial banks that have personal accounts also provide business bank accounts. You should start with your bank where your personal account is and simply inquire about a business account.
You need to consider that any bank and even credit union can have business accounts. You will need to check if this makes sense to go with a traditional bank or credit union.
You can do that by following the next step: compare the service.

Compare Services

What I mean is that each institution will have certain requirements and perks that go along with your business account. Here is what to look out for. You need to know what your minimum or average balance is, for the account. This is the amount of money you need to have deposited at any given time. You also need to know your fees and how to avoid them? Yes, each bank will charge you monthly fees and will have specific rules for how to avoid them.

For example, If a business account has a $10 monthly fee and a $3000 minimum deposit limit, this generally means you can avoid the fee if your deposits do not dip below this threshold. It’s also a good idea to shop around for the best to compare accounts with multiple banks to see which is the best deal.

Other considerations about the service are a minimum opening deposit you need to start an account, and integration for accounting software, and what perks they offer. Perks can include lines of credit, discounts on payment processing for your employees, and your own banking representative.

Application 

Typically, You’ll need to have your DBA, Articles of incorporation or LLC documents, your EIN, and deposit fees. Here is an example of a bank that spells out what you are going to need. I’ll choose a sole proprietorship and boom! Here is all I need to setup up:

Since most businesses are set up as sole proprietorships, they don't need too much information. They will need EIN, DBA, Social Security, driver’s license, and your deposit fees. I can just fill out the online form with the information the bank required when first started and I’ll be done.

That’s it. If you opened up a personal bank account the process will be similar when opening up a business bank account. Depending on the bank and your structure, you may need to have multiple people sign documents to have access or be able to spend any money that comes into the business. You can always schedule a meeting with your SBDC consultant to discuss accounting and payroll systems are available or if you need them at all for your particular type of business.

Funded in part through a Cooperative Agreement with the U.S. Small Business Administration. All opinions, conclusions, and/or recommendations expressed herein are those of the author(s) and do not necessarily reflect the views of the SBA.