How to open a business bank account, step by step

How to open a business bank account

The order matters: the bank account comes after the business has a name, a structure and a tax ID, because the bank asks for proof of all three.

1. Settle the business structure and name

   Decide whether you run the business as a sole proprietor or through an LLC or corporation. If you trade under a name other than your own, register it as a DBA where your state or county requires it.

2. Get a tax ID

   Apply for an EIN with the IRS. The IRS says you never have to pay a fee for an EIN. If you are forming an LLC or corporation, form your entity through the secretary of state before you apply for an EIN. A sole proprietor may be able to use a Social Security number instead, because the SBA lists it as the alternative to an EIN for sole proprietorships. Ask the bank which one it wants.

3. Gather the documents

   The SBA lists the most common ones as an EIN (or a Social Security number for a sole proprietorship), formation documents, ownership agreements and a business license. some banks may ask for more, so check the bank's list before you start.

4. Compare accounts and fees

   Look at introductory offers, interest rates for savings, checking and lines of credit, transaction fees, early termination fees and minimum account balance fees. The SBA notes that rates, fees, and options vary from bank to bank.

5. Apply and fund the account

   Apply online or at a branch. The bank checks the business and the people behind it, then asks for an opening deposit if the account has one. Once it is open, deposit all daily receipts in your business checking account, and pay business costs from it.

Documents needed to open a business bank account, by structure

What you bring depends on how the business is set up. The table maps the SBA's list of common documents (an EIN (or a Social Security number for a sole proprietorship), formation documents, ownership agreements and a business license) to each structure. Each bank sets its own list, and some banks may ask for more. The next section explains who counts as a beneficial owner and a control person.

Why banks ask for these documents

Banks do not choose these documents at random. Federal rules issued by FinCEN, the Financial Crimes Enforcement Network, tell banks what they must collect before they open an account.

The first rule is the customer identification program. A bank's notice to customers reads: your name, address, date of birth, and other information that will allow us to identify you. For a U.S. customer, the identification number is a taxpayer identification number. To check the person, banks look at unexpired government-issued identification bearing a photograph or similar safeguard, such as a driver's license or passport. To check a business, they look at documents showing the existence of the entity, such as certified articles of incorporation, a government-issued business license, a partnership agreement, or trust instrument.

The second rule is customer due diligence, often called the CDD Rule. It requires banks to identify and verify the identity of the natural persons who own, control, and profit from companies when those companies open accounts. Beneficial owners are any individual who owns 25 percent or more of a legal entity, and an individual who controls the legal entity. The control person is a single individual with significant responsibility to control, manage, or direct a legal entity customer. For each of them, the bank collects name, date of birth, address, and social security number or other government identification number.

The CDD Rule covers a legal entity customer, meaning a corporation, limited liability company, or other entity created by the filing of a public document with a Secretary of State. That is why an LLC owner fills in an ownership form and a sole proprietor usually does not: sole proprietorships and unincorporated associations are not legal entity customers.

• Since a FinCEN order dated February 13, 2026, banks may limit the beneficial owner check to times such as when a legal entity customer first opens an account with a covered financial institution, instead of repeating it at every new account.
• The bank's ownership form is separate from the beneficial ownership report that FinCEN once required companies to file. FinCEN now says U.S. companies are exempt from BOI reporting requirements and no longer required to file BOI reports.

Can you open a business bank account with an EIN only?

An EIN alone is not enough to open a business bank account. The EIN is the business's tax ID, and the bank also has to identify the people behind it and confirm the business exists. Expect to show photo ID for yourself and, for an LLC or corporation, the formation documents your state issued.

The SBA notes that getting a DBA and federal tax ID number (EIN) allows you to open a business bank account. For a sole proprietor trading under a business name, the DBA filing and the EIN together are usually what the bank wants to see, along with your own ID.

If you have applied for an EIN and are waiting for it, some banks can still open the account. Federal rules let a bank set a customer that has applied for, but has not received, a taxpayer identification number. Not every bank does this, so ask before you apply.

Can you open a business bank account without an LLC?

You can open a business bank account without an LLC. The SBA's list of documents names a Social Security number as the tax ID for a sole proprietorship, so banks expect sole proprietors as customers. Under IRS rules a sole proprietorship has no separate legal existence: the business has no existence apart from you, the owner. An LLC is different. It is an entity formed under state law by filing articles of organization.

For a sole proprietorship bank account, the bank identifies you as the owner. If you use a business name, it may ask for your DBA filing so it can accept payments made out to that name. Requirements for a DBA requirements vary by business structure as well as by state, county, and municipality.

Deposit insurance follows the structure too. For a sole proprietorship, the FDIC says deposits are insured as the Single Account deposits of the owner, added to the owner's other Single Accounts at the same bank. An LLC's or corporation's deposits are insured separately from the personal deposits of the organization's owners, and all deposits of one business at the same bank are combined and insured up to $250,000.

Can you use your personal bank account for business?

The IRS advises against using a personal bank account for business. IRS Publication 583 says one of the first things you should do when you start a business is open a business checking account, and that you should keep your business account separate from your personal checking account and use the business account for business purposes only.

Separate business and personal finances make records easier to keep and to defend. Every deposit in the business account is business income, and every payment out is a business cost or a transfer to you. In a mixed account, you have to sort each line by hand at tax time.

For an LLC, a personal account causes a different problem. The SBA says business banking offers limited personal liability protection by keeping your business funds separate from your personal funds. Paying LLC costs from your own account mixes the two.

Consumer protections can differ too. Under Regulation E, an account means one established primarily for personal, family, or household purposes. Read the bank's business account agreement to see how it handles unauthorized transfers and how quickly you must report them.

What to check in fees before you pick an account

The SBA's list of things to compare on a business checking or savings account is introductory offers, interest rates for savings, checking and lines of credit, transaction fees, early termination fees and minimum account balance fees. Ask each bank for its fee schedule and read it against how your business actually uses money.

If you also take card payments, the SBA lists separate costs to compare on a merchant services account: the discount rate, the percentage charged for every transaction processed, and transaction fees, the amount charged for every credit card transaction, plus Address Verification Service (AVS) fees, ACH daily batch fees and monthly minimum fees.

• Monthly fee. Ask whether the account has one and what minimum balance, if any, waives it.
• Transaction limits. Ask how many transactions and cash deposits are included each month and what each one costs after that.
• Cash deposits. If customers pay you in cash, ask about the fee for depositing it and where you can make deposits.
• Payment connections. If you take card payments through a processor, you will still need to connect it to a business checking account to receive payments.
• Early termination. Ask whether there is a fee for closing the account soon after opening it.
• Deposit insurance. FDIC insurance covers $250,000 per depositor, per FDIC-insured bank, for each account ownership category.

Do you need a separate bank account for your business?

The SBA says to open a business account as soon as you start accepting or spending money as your business, and that business banking offers limited personal liability protection by keeping your business funds separate from your personal funds.

A sole proprietor is the business: you can be held personally liable for the debts and obligations of the business. A separate account does not change that, but it still keeps your records clean, which makes taxes and bookkeeping easier.

This page is general information, not legal or tax advice. Rules vary by state, county and city, and each bank sets its own requirements on top of the federal ones.

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Questions about opening a business bank account