Opening a business bank account is not only easy but typically a necessity. Here we will provide you a closer look to know what you need to open a business bank account and which is the easiest bank to open a business bank account.
The requirements to open a bank account vary depending on the business you have, the type of bank account someone wants to open, and the bank. It is essential to keep your business and personal finances separate. However, one can set up a business checking and saving account.
One must go for a business bank account when they feel ready to start receiving or spending money as a business. A business bank account assures a person in business to stay legally compliant and protected and provides various benefits to your employees and customers.
Business owners manage company finances, streamline invoicing, and ease up tax filing and that needs a business bank account, as it appears more professional. To open any business bank account, you need an employer identification number, personal identification documents, and articles of incorporation.
We will guide you about some standard features of the small business bank account, some best bank picks, and how to open a business account. Please keep reading to learn what it takes to open a business bank account.
Why should one open a business bank account?
While starting a new business, opening a business bank account is imperative to make things official. Each stage of business comes with new challenges, but you must know where to keep the money. A business bank account is imperative for money transactions to all companies, including large corporations and sole proprietorships.
However, one should read the book and learn about the few things they need before opening a business bank account. There are higher fees, low-interest rates, and overwhelming options to save your real venture.
It is fundamental to keep all your business money in order; therefore, opening a business bank account is a great kickstart. Opening a business bank account can help you in various ways you can not expect, along with establishing a business credit history.
- Protection of personal funds
- It makes businesses trustworthy.
- Avoid tax issues
- Maintain a professional appearance
- Establish business credit
- Credit card acceptance
- Give access to company funds
- Automate bookkeeping
- Protect yourself from business liability
- Business-friendly transaction limit
Protection of personal funds
If anyone uses a single bank for personal and business finances, their savings could be at risk in a lawsuit. For instance, if someone sues the company and gets compensation from the court, your money will be at risk, whether it has nothing to do with your business.
Remember that even a separate small business banking account protects your savings in worse situations.
It makes businesses trustworthy
To run a business, one must have authenticity, as the employer must provide customers and suppliers with a safe and secure environment. Making payments from a business bank account is a great way to build the trust of the concerned people.
Avoid tax issues
Maintaining a separate business account will make tracking business earnings and expenditures easier. It can save a lot of hustle and hard work when you file taxes and avoid inconveniences with Internal Revenue Services.
Separating personal and business accounts will depict that someone is running a legit company and you are not taking it for granted. A legitimate business assurance will help you to avoid business tax deductions.
Maintain a professional appearance
If anyone continues to use personal funds for business expenses, it could look more professional. It can impact different clients and other businesses badly as people will take you very unprofessional and assume that you have just started. This business will only last for a while.
Your company will appear more professional if the employer writes vendor checks from a business bank account. Customers will feel more secure while writing a check to a business name than any individual.
Without a business account, one can feel that you are lazy enough that you are even unable to produce your business as a legal entity. Using your business credit card to purchase things for your business will give you a mature professional look. In addition, it will give confidence to your employees and legitimacy to your business.
A business account may improve the image of your business as one can use sources of funds that will make them brand their business name. It can also significantly impact people that someone is taking their business seriously.
Establish business credit
After figuring out the easiest bank to open a business account locally, it will create a relationship for credit purposes. The lenders usually check the credit history for approval to loan the business money.
To take out a loan for finance equipment that will even help to hire more employees, or if anyone wants to expand their business, a good credit history will allow the company to get a decent loan with very little interest.
Credit card acceptance
Refrain from going for credit or debit card transactions from personal bank accounts, especially if the customers are habitually paying through cards. There is a need for a business bank account to process the debit or credit card payments.
In a line of credit, it could be not easy to make purchases on behalf of your business. When you establish a good relationship with a bank along with a credit history, they will grant you a business credit card with a reasonable interest rate. With a business account, you can retain customers who prefer to pay with credit or debit cards.
Give access to company funds
While running any corporation, a team always needs to access the company funds for company purchases and many other things. It is not suitable to give personal account access to your business associates. Hence, making arrangements for a business bank account is always essential.
Bookkeeping is about managing accounting, budgeting, paying bills, invoicing, and understanding business finances effortlessly. With a business bank account, you can synchronize your accounts with bookkeeping software.
Having a business account will enable you to automate your bookkeeping, allowing you to check on business health explicitly. Additionally, one can monitor business cash flow, income, and expenses monthly or whenever you want. You can keep an eye on your transactions easily while having a business bank account.
Protect yourself from business liability
When someone establishes a business as a corporation or a limited liability company (LLC) and the company cannot pay the debt, your assets are safe, and creditors can not claim them.
You can only claim liability protection if you have a separate business account. The judge can consider you accountable for the business debts, and you can lose everything you own. Hence, a business bank account can give you a sense of security.
Business-friendly transaction limit
Small business bank accounts need endless deposits, withdrawals, transfers, and payments. Some banks have limits on transactions, such as how much and how many amounts you can do from your account in a short time.
What do you need to open a business bank account?
Opening a business checking or checking account is straightforward if you have a handful of information. We will guide you through the most common requirements to open a business bank account.
- Employer Identification Number (EIN) or Social Security Number (SSN)
- Personal and business identification
- Sole proprietorship
- Limited liability company (LLC)
- Limited liability partnership
- Business license
- Certificate of an assumed name
- Monthly credit card revenue
- Initial deposit
Employer Identification Number (EIN) or Social Security Number (SSN)
The first and foremost thing one needs is an employer identification number, which we also call FEIN, Social Security Number, or Tax Identification Number. Most banks ask their customers to provide their employer identification number (EIN) to open any business checking or saving account.
Anyone who has never filed for a tax ID number can open a business bank account with a personal Social Security Number. Depending on the type of business, one may need to apply for an EIN.
Some banks permit sole proprietorship for a small business account only with a Social Security Number. Business accounts allow small business owners to manage company finances and simplify tax issues.
Depending on the type of business, one may need to apply for an EIN. Even a sole proprietorship with no employees requires it, but the business as a limited liability company (LLC) may need EIN, although it depends on whether they have employees. Research well to decide whether you need an EIN.
If you do not have an Employer Identification Number (EIN), you can obtain it for free by filling out the application on the (Internal Revenue Services) IRS’s website. However, having a valid Social Security Number and operating a business in the United States or its suburbs would be best.
Personal and business identification
Businesses with more than one owner must include the personal details of each partner with 25 percent or more shares. Their parties may consist of:
- Government-issued driving licenses or passports are common types of IDs.
- Personal email and phone number, and home mailing address.
- Date of birth
- Social security number
To open a business bank account, one must identify the person and business. It may include your driver’s license or passport, or partnership agreements. Your business may need some additional documents, which are given below:
You must present a social security number if the business type is a sole proprietor. If your business has some assumed names, they must provide a certificate showing the terms.
Limited liability company (LLC)
This type so the company will need to present EIN and business registration. If the employer is the sole owner, their name should be on the list.
Limited liability partnership
In this type of business, the business person must provide an agreement that displays all partners’ and companies’ names. This type of agreement will outline each owner’s rights and responsibilities that will help to operate a business better.
Bank usually needs proof of an appropriate license to open a business bank account. The requirement for obtaining a business bank account may vary depending on your location, as each area has different needs.
Certificate of an assumed name
Advertising your business to your customers differs from the company’s legal name and needs a certificate of an assumed name as a doing-business-as (DBA) name. Bank needs a copy of the certificate when you open your account.
Monthly credit card revenue
A business that wants to open a merchant services account to process debit and credit card transactions then will provide the bank with details of average monthly credit card revenue.
Small businesses or startups may have yet to have any prior credit card revenue with an estimate of expectations.
After establishing your personal and business identities, the next step is an initial deposit to open an account. However, initial deposits may vary from bank to bank and account type after selecting a business bank account with an initial deposit amount with a minimum daily manageable balance for the business. Identify the amount of the initial deposit. Check out limited-time offers or deals, as many banks waive initial warranties to qualify new accounts.
How to open a business bank account?
Opening a business bank account is easy and typically necessary for any business. After completing the documentation, you are ready to open a business bank account; the next you need to. Correct documentation can make a business bank account opening much more manageable.
- Review different types of bank accounts
- Selection of bank
- Apply for the account
- Make an opening deposit and start using the account
- Close the old bank accounts
Review different types of bank accounts
With personal banking, your company may need several types of business bank accounts. The type of account will depend on someone’s needs or whether they need to open multiple accounts. The most common types of bank accounts are:
Business checking account
A business checking account is an excellent choice for managing payroll, basic financial tasks, and expense regulations that keep the business running. It is similar to a personal checking account, most suitable for receiving payments and spending.
Business saving account
It is the best place to keep your business capital as it is possible to earn interest on funds, but interest-bearing accounts are rare. A business saving account is the best place to hold your earnings.
One can put money in the account the business does not need to spend shortly as saving accounts earn interest over time. However, in keeping tabs, you have more limitations to access your funds.
Merchant services account
If anyone plans to accept credit and debit card payments, check with your bank whether they can set up a merchant account. Depending on your bank, some banks offer merchant services. One should shop around before settling for any particular version, keep an eye on the rate, and even negotiate about it once a year.
Credit card account
One can use a business credit card for emergencies or miscellaneous items for the business. The real benefit of a credit card for the owners of a startup with bad credit is that it will help to improve the business or credit score.
Selection of bank
Several accounts are available, each with its purposes and benefits, and one has to dig deeper to choose one. Check out monthly transactions, ATM access, initial fees, the minimum balance for interest or additional fees, and much more.
After finding the correct type of account, you need to select the right bank while keeping the following things in mind:
In the very first place, decide on the bank that can provide essential business bank accounts as per your demands and needs for the business in the future. If anyone plans to apply for a business credit card or any kind of loan on business in the future, they must initially check whether their selected bank will offer it in the long run.
Usually, business bank accounts have monthly fees, including per-transaction fees, after a certain limit of monthly transactions. There could be specific other transaction fees, including cash deposit fees, ATM fees, and fees for wire transfers. Monitor all available services and additional costs that can affect your profit.
There are more interest rates on business saving accounts. However, some checking business accounts also offer interest. Always choose versions offering higher interest rates, but ignore other factors.
ATM access and branch network
Choose a bank with online facilities and a sizable fee-free ATM network with easy access to cash. Many customers want to prioritize personalized customer services that can offer higher fees than other banks, but still, they have enough worth.
Account management tools
Make sure your chosen bank account provides additional features of viewing your balance, paying bills, and online and mobile banking to move funds through a user-friendly mobile app. In addition, they must offer invoicing or integration that makes bank reconciliation much more straightforward.
Gather the required documents
After knowing which business bank account in which bank you need, gather all the essential documents according to the bank’s demands. After proper documentation, you are ready to apply, but make sure to sort out any ambiguity, if any, and reach out to the bank.
Apply for the account
With innovative manners, many banks offer online business bank accounts, and only some want you to visit the branch to attain in-person services. If you have completed the paperwork already, there is no need to wait, and you can apply easily.
Some people go through network problems or many other things while using online, or there would be some trouble in the application process, so one must contact the bank directly. Make sure you have all the appropriate information before applying to avoid any issues in the future.
Make an opening deposit and start using the account
When completing all the documents and choosing the account, go ahead with business funds and transfer them to your new account. Deposit funds and begin using them like any other bank account. Typically, banks require you to make a certain deposit amount to set up the account.
Business bank accounts can transfer money from one bank to another, withdraw cash or make transactions of money through electronic or wire transfer, or even one can write a check.
Close the old bank accounts
If anyone used another business bank account previously, make sure that you close it. Closing the bill will help avoid other extra charges or potential fraud schemes.
Moreover, a business bank account will help you to save your funds from any lawsuit. It will help to avoid speeding up tax time, and you can transfer business-related funds without your personal account number.
How to open a free business checking account online with no deposit?
It was a practice to visit a particular branch to open a business account; however, now, there are plenty of options to open a bank account online. There are various free business checking accounts online with no deposit or minimum opening deposit.
A business checking account is designed specifically for companies as per their needs, such as more withdrawals or deposits of large amounts of cash. In addition, they are making payroll and focusing on accounting tools compared to personal accounts, focusing more on paying bills and ATM access.
Many business checking accounts assure cash management, fraud protection, business lending services, and tools that will help companies deal with funds or payroll directly. It will help to keep the organization operating and keep track of performance.
Business checking accounts allow businesses to track their finances without any difficulty. Companies can easily access the funds and make necessary payments through online banking, debit cards, and printed checks.
Spending track in the business checking accounts can help avoid penalty fees while improving business budgeting. Monitor all the bank’s available features and tips to manage your money.
The best option to open a free business checking account online account with no deposit
You can open your business checking account online with no or very minimum deposit amount. You do not need local banks, but you can avail of the services from large national banks like Bank of America.
We will guide you with some accessible accounts online with no minimum deposit; you can check below:
BlueVine business checking
The best option is a $0 sign-up bonus, so one must avail of it to open an account without any deposit and earn interest on funds. With Blue Vine business checking, there is no minimum deposit, minimum balance requirement, incoming wire fees, and earning of 2 percent interest on the account balance.
BlueVine business checking account offers unlimited transactions, fee-free ATM access, two free checkbooks, scheduled one-time and recurring payments, pay vendors and bills, and mobile and online banking.
NBKC Business Checking
Digital banking accounts for best limit-free banking with no minimum monthly or opening deposit. One can quickly open an NBKC business checking account online to manage all your finances, even on a computer or digital gadget.
This account has no limit restriction, minimum balance, or unlimited transactions with ATM access. One can quickly deposit and withdraw cash with massive online banking, making it a fee-free business checking account in addition to depositing eStatements, cashier checks, overdrafts, and incoming domestic wires.
Process of opening a free checking account online with no deposit
Along with the best available options, there is no need for an early deposit, and even one can open it online; we will guide you on how to open these accounts, but the opening options will vary slightly depending on the options, including the type of account and the platform you are using. We will guide you on how to open a business checking account in the following steps:
- Sign up and input your basic personal information, filling in the basic information.
- Entering the business information depending on the entity type to validate your business formation.
- Agree on the terms and conditions to submit your application.
Small business bank account
For A small business owner, a business checking account is a key that can establish a professional presence. It can also prepare taxes and keep your expenses separate. The best online banks leverage technology that will make administrative work easy.
For small business bank accounts, most banks offer free ATM withdrawals, digital wallets, multi-currency accounts with no foreign transaction fees, and multi-director access to funds. It helps to access various features under one roof, build a good relationship with your bank, and work together to find the right solution to grow the business.
Some crucial factors to consider while opening a business bank account
Having a business bank account is always a privilege for business people, as it can simplify your life. We will guide you with some of the essential tips that give you the freedom to attain benefits from the business checking accounts:
- Compare several bank accounts and find the most tempting one to open a statement, the way you can manage money easily. Compare monthly fees regularly and transfer funds from one bank to another if you find anything better.
- Do fall for accounts with transaction limits or extra or hidden charges. Ensure that your business bank account leaves extra room for you to grow.
- Search for the accounts which save time with accounting software integration. Go for the business bank account, which ensures the management of business finances, creating expense reports and balance sheets.
Getting a business bank account is a good idea, as it also offers debit or credit cards, which will take your business to full swing. However, the most important thing to understand is what you need to open a business bank account for up and running a business.
Usually, business people have their plates full, so opening a business bank account will simplify their financial situation and save time on saving taxes, doing bookkeeping, and saving from creditors. Is it easy to open a bank account? Indeed, it is easy, and one can look more professional and a serious business owner.
While opening an accessible business checking account online with no deposit, one can receive approval very quickly, receive login information on a business debit card, and start using it immediately. More and more business people prefer digital-first banks to manage their funds without the tension of excessive or hidden fees.
Moreover, a small business account gives people a one-stop shop for all their business needs, usually with a free or no-deposit bank account. Some business bank accounts could be restrictive; research well to find an account with additional free transactions and other valuable services.
In a nutshell, a business bank account is a must to grow your product and services and make your business profitable. Always compare the beneficial options and find the perfect fit for your business.