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A Step-by-Step Guide to Opening a Business Checking Account

Opening a business checking account is essential for all new business owners. We explain how to get started with this step-by-step guide.

Do you own a small business? Are you thinking about opening a business checking account?

A business checking account is designed to help small business owners have a separate account for their business finances. It works in a way that’s similar to personal checking accounts, but with a few important differences.

Here’s what you need to know about how to open a business checking account.

Small Business Checking Accounts vs Personal Checking Accounts

While most people can open a personal checking account, business checking accounts require some extra documentation. Before opening one, you’ll need to produce an ID, Social Security number, and business license. You’ll also need Articles of Organization if you’re opening an LLC or Articles of Incorporation if you’re starting a corporation.

While personal checking accounts are usually free, business checking accounts usually come with higher monthly fees. Yet interest rates on business checking accounts are typically lower. However, recent trends have shown an increase in free online checking accounts for small businesses.

Small business accounts also allow you to order employee debit cards, which allow employees to take out money or make purchases. The owner of the account can set spending limits.

Benefits of a Small Business Checking Account

Most of today’s small business owners have a small business checking account and for good reason.

Firstly, it can help you keep your business records organized and separate your business finances from your personal ones. You can easily take a look at your earnings and expenditures and determine what your profits are each month.

Separating your business and personal finances can also make filing your taxes easier. You can deduct business expenses from your tax return and easily prove to the IRS that they were for business.

Having a small business checking account can also help you to accept credit cards from your customers. Your bank can help you set up a credit card system using the account.

You’re also allowed to have multiple signers who use a small business checking account. This means others can use it. If you have an administrative team, your employees can handle certain banking tasks while you focus on the more creative side of your business.

A separate small business checking account also signifies to others that you’re running a legitimate, professional enterprise. You don’t want to be writing checks with your personal name or having customers issue payments to your personal account.

A business checking account shows that your business is serious and well-organized. And opening one may be easier than you think.

1. Find the Right Type of Account 

The first step in opening a small business checking account is to find the right type for you. You may, for example, be looking for an online-only account, which usually has low or no fees. These are used for businesses that don’t require cash deposits.

Traditional accounts offer a wider range of services. You may be able to open a business savings account, and cash deposits are allowed.

2. Find the Right Bank

It’s important to choose the right bank for your small business checking account. You’ll want to find one with a number of local branches and ATMs, as you want it to be a convenient stop for your employees and customers. There should also be a user-friendly online and mobile experience.

The right bank for you will have fees you can afford. Consider things like monthly fees, transaction fees, and ATM fees. You’ll want to make sure you are getting a good rate.

You should also have accounts that can easily sync up with any existing bookkeeping software you’re using. If you have an existing relationship with a local banking branch, this may be a good place to start. Just make sure that all other components line up with your business needs.

3. Gather Your Paperwork

You’ll need to get your documents together before opening your account. Much will depend upon the type of business you’re running.

If you’re opening a sole proprietorship, you’ll need two forms of ID. You might also require a fictitious business name certificate.

If you’re starting a business partnership, you’ll need your federal Employer Identification Number (EIN,) as well as a copy of your Articles of Organization.

If you’ve got a Limited Liability Company (LLC,) you’ll need your EIN and organizational documents. You may also need a business license.

If your company is going to be a Corporation (C-Corp,) you’ll need your EIN and articles of Incorporation. You’ll also need to provide your corporate charter and business license. You may also need a copy of your corporate resolution.

4. Open Your Account

You can open your small business checking account either in-person or online. You’ll need to produce the appropriate documents either way.

It may be possible to get approved for your account faster if you open your account online. Yet some clients prefer the face-to-face attention of live interaction.

5. Deposit Your Funds

You can make your first deposit into your new account by doing a transfer or writing a check. You may even be able to deposit checks remotely. Ask your bank if this service is available.

Opening a Business Checking Account

Opening a business checking account is an exciting step toward getting your new enterprise off and running. Once you’ve found the right bank and account for you, all you need to do is gather your documents and open your account. Then get ready to deposit your profits!

Our team is hard at work building Hatch Business Checking, a modern business bank account with no minimum balance requirements, no NSF fees penalties, and exclusive access to cashback rewards and business perks! Sign up for our waitlist now and get your first month for free when we launch later this year.


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