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Updated on Wednesday, December 2, 2020
Similar to personal checking accounts, you can easily open a business checking account online, often in a matter of minutes. However, you will need the correct documentation — ranging from your business’s formation papers to your employer identification number — to do so.
Here’s what you need to know about opening a business checking account online.
- How do I open a business checking account online?
- What do I need to open a business checking account online?
- Benefits of business checking accounts
- Best business checking accounts
How do I open a business checking account online?
At many financial institutions, the process of opening a business checking account online is very similar to the process of opening a personal checking account online. You can expect to take the following steps:
- Check your eligibility: Not all banks allow businesses to apply for a checking account online. For example, Wells Fargo will not allow customers to open an online checking account for trusts, government agencies or units, American Indian Tribal Governments or publicly traded companies. These types of entities are required to visit a branch in person. Also, banks may limit the kind of businesses that can open bank accounts with them at all. Wells Fargo has a list of industries that cannot open bank accounts with them at all, including lending businesses, marijuana dispensary businesses and telemarketing agencies.
- Provide your financial institution with information: This includes information about yourself and your business (including the required documentation), which you will provide via an online application.
- Make your initial deposit: Many business checking accounts require an opening deposit. This could be a very small amount, such as $25 for Wells Fargo.
What do I need to open a business checking account online?
While the exact requirements differ from bank to bank, typically you will need the following information and documentation to open a business checking account online, according to the Small Business Administration (SBA):
1. Your Employer Identification Number (EIN)
Many banks will require you to provide your Employer Identification Number (EIN) when applying for a small business bank account. An EIN, which is also known as a Federal Tax Identification Number, is used to identify business entities. You can apply for an EIN for free online with the IRS. If you’re a sole proprietorship, the bank will likely just ask for your Social Security number instead.
2. Your business’s formation documentation
Your bank may require you to provide your business’s formation documents, which could include documents such as the date your business was formed, the country and state in which the business was legally formed, where it operates, its legal name, its “doing business as” (DBA) name, the personal information of everyone on the application and the personal information of those who own 25% or more of the business.
3. Ownership agreements
Additionally, your bank may require you to provide your business’s ownership agreement documentation upon applying for a checking account. Ownership agreements are typically viewed as the governing document on how your business operates, how it’s owned and how it’s organized.
4. Business license
Another key piece of documentation your bank will likely require you to present is your business license. This document verifies that you are legally permitted to conduct business in a certain region. Depending on your business, you may be required to have a combination of licenses and permits from both federal and state agencies. Be sure to ask ahead of time what you will be required to present before applying for a business checking account.
In addition to these documents, your bank will also require you to provide the personal information you should typically provide when opening a personal bank account — such as your full name and government-issued ID to verify your identity. Keep in mind that if your business is a nonprofit or a C-corp, you may also need to provide additional documentation, such as your 501(c) letter from the IRS, or articles of incorporation and your corporate charters.
Benefits of business checking accounts
There are several benefits associated with having a business checking account that is separate from your personal checking account. Those benefits include:
- Protection: Having a business checking account that is separate from your personal checking account provides you with limited personal liability protection, as it keeps your business funds separate from your personal funds. Additionally, banks that offer merchant services give your customers purchase protection.
- Organization: Keeping your business checking funds separate from your personal checking funds not only protects you from liability, but it also allows a much higher level of organization and professionalism. Many business checking accounts even come with additional features, such as QuickBooks integration.
- Peace of mind: Many business bank accounts also come with the option of a line of credit for the company, which can be used if emergency expenses arise. This can be beneficial to keeping your business afloat if a crisis hits.
- Added perks: Business checking accounts can come with a plethora of perks, such as interest earned on funds, free transactions, waived monthly fees and more. Be sure to take advantage of these perks if they are available to you.
Best business checking accounts: What to look for
When looking for a business checking account, you should prioritize:
- Low transaction fees
- Low minimum opening deposit and minimum balance requirements
- High interest rates
- Access to physical bank branches
- Extensive ATM network
Below, we’ve compiled our top five best business checking accounts, based on data from DepositAccounts, a database of offerings at more than 17,100 banks and credit unions.
To make the cut, the account had to have minimal fees, a minimum of 50 transactions per month and the option to waive monthly fees if certain requirements are met. While offering an APY wasn’t a requirement, it was taken into consideration when developing this list. You can check out our full list of the best business checking accounts here.
|5 of the Best Business Checking Accounts|
|Account name||Minimum balance to waive monthly fee||Number of transactions per month with no charge||APY|
|BlueVine Business Checking||N/A||Unlimited||1.00%|
|Axos Bank Business Interest Checking||Average daily balance of $5,000||Up to 50 items||0.81%|
|Radius Bank Tailored Checking||Average monthly balance of $5,000||Unlimited||0.10%|
|TIAA Bank Business Checking||Daily balance of $5,000||First 200 items||None|
|First Citizens Bank Basic Business Checking||None, but must be enrolled in paperless statements to waive monthly fee||Up to 175 items||None|