How to Open a Business Bank Account in 2023

Starting a new business requires attention to various aspects, and one of the essentials is establishing a business bank account. Opening one can feel intimidating, but with the right guide, the process becomes more manageable. In this detailed blog, we’ll cover everything you need to know about opening a business bank account, ensuring a seamless experience for you and your growing business.

Key Takeaways

  1. Different Types of Business Accounts Available: From traditional accounts offered by commercial banks to online accounts designed for digital-based businesses, the range caters to various business needs.
  2. Required Documentation Depends on Business Type: The documents needed to open a business bank account depend on whether the business is a sole proprietorship, partnership, corporation, or LLC.
  3. Depositing Funds into Business Bank Account: Businesses can start fund their bank account via check, wire transfer, or direct transfer from personal accounts. It can then accept further payment from customers via multiple methods.
  4. Benefits of a Business Bank Account: Opening a business bank account lends a professional appearance to your business, simplifies tracking finance, and allows access to a variety of banking services.

Understanding the Types of Business Bank Accounts

In recent years, business bank account options have expanded, particularly due to the rise of online banking. You can now access a bank account that meets your business’s unique requirements. There are several types of business bank accounts to consider:

Traditional Business Bank Accounts

Traditional business bank accounts are available through commercial banks, both large and small, and are ideal for established businesses with predictable cash flow. Local banks are more accommodating for smaller businesses, offering one-on-one attention and physical branches. However, they may be limited when it comes to national or international transactions. In contrast, large commercial banks provide extensive services for international transactions and credit or debit card processing but tend to be more suited for larger clients.

Free Business Bank Accounts

Only a few business bank accounts are genuinely free; generally, they have no monthly service fee but may have fees for specialized services. A prime example is Novo, which only requires a $50 initial deposit and does not charge any monthly service fees or fees for incoming wires, non-sufficient funds (NSFs), or overdrafts. Novo also seamlessly connects to various business apps, such as Slack, Xero, and Quickbooks.

Online Business Bank Accounts

With the growing prevalence of online businesses, online business bank accounts have gained popularity. These accounts are dedicated to operating exclusively online, catering to freelancers and entrepreneurs who may not require physical branches. Typically, online banks charge lower fees as they do not need extensive staffing or branches.

Business Savings Accounts

Business savings accounts are essential for accumulating funds for major expenses, future expansion, or providing a financial buffer. Many business bank accounts offer savings accounts with checking, with online business bank accounts generally offering higher interest rates. The lack of physical branches allows them to have lower operating overhead, leading to higher interest rates provided to customers.

Opening a Business Bank Account: Required Documentation

To open a business bank account, specific documentation is needed, including:

  • Social Security number
  • Government-issued photo ID
  • Full legal name, home address, email address, and phone number

Additional documentation will be required based on your business type:

Sole Proprietorship

In this case, documentation requirements would be similar to those for a personal bank account. However, if you have employees, need to pay sales tax, or operate under a different name, you would need an Employer Identification Number (EIN) from the IRS and a fictitious business name certificate or DBA (Doing Business As) issued by your state or county.


You need to provide a copy of your partnership agreement, a valid business license, and an EIN showing that the partnership is a standalone entity.

Corporations, S-corporations, or LLCs

For these business types, you need an IRS-issued EIN, articles of incorporation or organization, a corporate resolution, and evidence of being registered with your state’s Secretary of State. You may also be required to provide a business license depending on your jurisdiction.

Depositing Funds into a Business Bank Account

When first opening your business bank account, you can fund it through a check, wire transfer, or by connecting it to a personal bank account for a direct transfer. Once your account is operational, you can accept payments from customers and clients by check, ACH, wire transfers, or third-party services like PayPal. For businesses that accept paper checks, online or mobile banking allows deposits by scanning or photographing both sides of the check.

Bottom Line

If your business is more than an informal endeavor or hobby, it’s time to open a dedicated business bank account. Taking this step will not only make your business appear more professional but also simplify tracking income and expenses. It also enables you to take advantage of the diverse services provided by business bank accounts. With this guide, opening your business bank account becomes easier, help secure your business finance, and support your business’s growth.


What are the types of documents required to open a business bank account?

The documents required depend on your business type. Solo proprietorships usually need similar documents to open a personal account, but they may need an EIN and DBA if they have employees. Partnerships require an EIN and a partnership agreement, while LLCs or corporations would need articles of incorporation or organization registered with the state secretary.

What is a Free Business Bank Account?

A free business bank account is an account that does not charge a monthly service fee. Sometimes, they may charge for certain other services.

How can I deposit money into my business bank account?

You can deposit money into your business bank account through a check, wire transfer, or directly from a personal bank account. Further payments can be accepted from customers in multiple forms.

How does a business bank account differ from a personal bank account?

Business bank accounts are separate from personal accounts and are used solely for business transactions. They provide a more professional image and allow businesses to utilize a wide range of banking services designed exclusively for businesses.

Can I open a business bank account online?

Yes, online business banking has grown in popularity. These are best suited for freelancers, online businesses or any business that does not necessarily require a physical branch. Online banks offer lower fees and competitive rates as they have lower operating costs than traditional banks.