How To Open a Business Bank Account

Benefits of business bank accounts

Before you start accepting or spending money as your business, you need to open a business bank account. Common business accounts include a checking account, savings account, credit card account, and a merchant services account. Merchant services accounts allow you to accept credit and debit card transactions from your customers.

Make sure you open a business bank account after you have your federal EIN.

Most business bank accounts offer perks that do not come with a standard personal bank account.

  • Protection. Business banking offers limited personal liability protection by keeping your business funds separate from your personal funds. Merchant services also offer purchase protection for your customers and ensures that their personal information is secure.

  • Professionalism. Customers will be able to pay you with credit cards and make checks out to your business instead of directly to you. Plus, you will be able to authorize employees to handle day-to-day banking tasks on behalf of the business.

  • Preparedness. Business banking usually comes with the option for a line of credit for the company. This can be used in the event of an emergency, or if your business needs new equipment. Your credit needs to be in good standing to be approved for this type of credit line.

  • Purchasing Power. Credit card accounts can help your business make large startup purchases and help establish and build credit for your business.

Find an account with low fees and good benefits

Some business owners open a business account at the same bank they use for their personal accounts. Rates, fees, and options vary from bank to bank, so you should shop around to make sure you find the lowest fees and the best benefits.

Here are things to consider when you are opening a business checking or savings account:

  • Introductory offers

  • Interest rates for savings and checking

  • Interest rates for lines of credit

  • Transaction fees

  • Early termination fees

  • Minimum account balance fees

Here are things to consider when you are opening a merchant services account:

  • Discount rate: The percentage charged for every transaction processed.

  • Transaction fees: The amount charged for every credit card transaction.

  • Address Verification Service (AVS) fees.

  • ACH daily batch fees: Fees charged when you settle credit card transactions for that day.

  • Monthly minimum fees: Fees charged if your business does not meet the minimum required transactions.

Payment processing companies are an increasingly popular alternative to traditional merchant services accounts. Payment processing companies sometimes provide extra functionality, like accessories that let you use your phone to accept credit card payments. The fee categories that you need to consider will be similar to merchant services account fees. If you find a payment processor that you like, remember that you will still need to connect it to a business checking account to receive payments.

You will need some important documents before you open a business bank account

Opening a business bank account is easy once you have picked your bank. Simply go online or to a local branch to begin the process. Here are some of the most common documents banks ask for when you open a business bank account. Some banks may ask for more.