Whether you run a business in your name or under a brand name, you will benefit from having a business bank account, especially as your company starts to grow. Most self-employed individuals, businesses and non-profit associations can open a business bank account. If you operate under a registered company name, you’ll need a business bank account.
How to Open a Bank Account for an LLC
“Check with your state, county and local governments to determine if you need any licenses to operate your business.” “It’s essential to prepare all necessary documents from the get-go in order to facilitate a painless process.” These offers can be a great way to earn a little extra revenue, but remember that these bonuses are taxable. Tracy Odell, vice president of content at FinanceBuzz, recommends asking whether the bank offers any bonuses.
If you operate on a cash-in and cash-out basis, your minimum balance may fall below the threshold, creating additional fees for your business. Minimum balancesMany banks have minimum balance requirements, especially brick-and-mortar banks. Be sure to check how much the bank charges for other things like cash deposits, using debit cards, withdrawals, transfers and account maintenance.
Best Business Bank Accounts in India in 2025
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Meeting legal and tax requirements
If you cannot find your EIN number on any relevant documents, you can call the IRS and request an EIN Verification Letter. You can also find your EIN number recorded on numerous company documents and records. To reduce self-employment tax in half, most LLC owners are eligible to file an IRS Form 2553 to have their LLC classified as an S-Corporation for tax purposes. Either way, all of these will be subject to self-employment taxes. A business owner can pay themselves through either a salary and bonuses with payroll deductions or through simply withdrawing LLC funds as an owner’s draw. These benefits can help give your company’s finances a boost depending on what kind of business you are in.
Once you’ve developed a formal business plan and received the necessary certificates and licenses for your business, opening a business bank account will be the next step. A business bank account is an good place for documenting income and expenses. Whether you’re a freelancer, small business owner, or full-scale corporation executive, a business bank account is an important stepping stone to becoming a fully-fledged business. Having a business bank account will give you the chance to manage your finances more professionally. The U.S. Small Business Administration recommends opening a business bank account once you’re ready to spend money or begin collecting income. If you’ve started your own business, you may be ready to open a business bank account.
Business credit cards
Their startup-friendly approval process means you may be more likely to get approved, even without an extensive business history. This streamlined approach means less waiting and more time focused on growing your business. That’s because Brex uses modern technology to verify both your identity and business information efficiently.
Fill out the application form
As a new business owner, you may not know what to expect when you open a business bank account. Rampenthal said that some banks do not offer the option of opening a business account online, either to reduce the risk of identity theft or due to the nature of certain businesses. Services at banks and credit unions might have different fees or interest rates attached to their services, and approval processes will vary.
The bank that works well for you as an individual might be a good fit for your business—or it might not. Money you put into a business COD account is locked in, along with the interest rate, for the term of the COD. Business certificate of deposit accountYou might choose a business certificate of deposit, or COD account, to save money at a slightly higher interest rate. It’s always a good idea to separate your personal life from your business life, especially when money is involved.
- If you have an LLC or a corporation, you are legally obligated to separate your personal and business finances.
- All-in-one small business tax preparation, filing and year-round income tax advisory
- In this case, a bank may request a copy of an official public filing stating the names of the LLC’s owners.
- Banking services provided by Sunrise Banks N.A., Member FDIC.
When you apply, make sure you know:
- There are other financial benefits to opening a business account.
- Opening a business bank account in 2025 is straightforward if you prepare ahead of time.
- Primary applicant and any additional applicants must have a minimum of 25% ownership in the business.
- Relay is a financial technology company and is not a bank.
- For example, if your business has multiple members/owners, the bank may require all of the business’ owners to come to the bank branch in person to verify their identities.
Unless you’re a sole proprietor or single-member LLC, you’ll need an EIN if you want to open a business bank account. However, you can choose to use a business or personal bank account if you operate under your own name. Assuming you operate under a business name, you’ll need to have a business bank account. You are required to have a business bank account if you have an officially-registered business.
MERCHANT SERVICES
While some financial institutions may accept a Social Security Number instead of an EIN for sole proprietorships, this option is becoming less common. This requirement reflects these entities’ legal separation from their owners and their distinct tax obligations. The role of an Employer Identification Number in this documentation process depends largely on a business’s structure. While using an SSN might seem simpler, an EIN offers enhanced privacy protection by reducing the need to share personal identification numbers. Whether you’re considering using an SSN or obtaining an EIN, this information will help you choose the path that best serves your business needs.
Sure, you might not see a huge difference when you compare a business bank account vs. a personal bank account. Here’s how to open a business bank account, whether at a physical branch, online or by phone. The time it takes to open a business bank account in India varies depending on several factors, such as the bank, the completeness of your documents, and the nature of your business.
Bank accounts
Learn what you need to know about how to open a business bank account for your LLC and help prevent your business bank accounts from overlapping with your personal accounts. Mixing personal finances with business bank accounts is called “commingling”. Citibank allows customers to open accounts with an ITIN and what do i need to open a business bank account provides various financial products, including checking, savings, and credit accounts.
WASATCH PEAKS: YOUR BUSINESS CHECKING PARTNER
Once you’ve arrived, you’ll show the bank representative your information, describe your business, select a bank account type, and fill out the paperwork. Regardless of which institution you choose, ensure a smooth application process by checking their documentation requirements and understanding their business banking features prior to applying. After you open a bank account for an LLC, you must implement proper accounting procedures for tracking all money coming in and going out of the business account. Your business will need to open a bank account to conduct business. Regardless of where you do business, you will find having a bank account for your LLC to be essential. It is important to remember that an LLC bank account should only be used for depositing business income and paying business expenses.
But setting up your account can be slower, and you may not be able to do it online. Look for merchant accounts that integrate with point-of-sale (POS) systems, have robust security protocols, and incorporate tools like invoicing and payment portals. Depending on your needs, you may want to open a checking, savings, or merchant account — or more than one of these. Before you start, you need to decide which type of business account(s) you need. Consolidating your cash flow simplifies bookkeeping, business tax planning, and payroll. This guide includes the full checklist of all the documents you need, plus tips on choosing the right type of account for your needs.