Financial Fundamentals Blog

A Quick Guide to Opening a Business Checking Account

Two small business owners reviewing their finances at a restaurant table


As soon as you start your business and are ready to accept and spend money, you should open a business checking account. It’s an important step to take because you want to make sure your business and personal accounts are separate. This helps you better determine how much your business is spending and receiving. Let’s take a look at what you can do with your business checking account and what you need to do to open one.


What You Can Do With a Business Checking Account

Business checking accounts offer benefits that standard personal checking accounts don’t. In addition to keeping your transactions separate so you can monitor your funds, a business account offers personal liability protection, professionalism, and a healthy credit history for your business.


With a separate business checking account, your business records will be more organized, making it much easier to file taxes. You’ll also be able to accept credit card payments, which you can’t do without a merchant account—a special type of account that enables you to process electronic payments. Once the merchant account is opened it’s linked to the business account where funds are transferred after processing the payment.


It’s important to note that while you shouldn’t have a united personal and business account, you also shouldn’t use your business account for personal expenses. It may be tempting—especially if you don’t have employees—but if you’re using your business account for personal expenses you risk losing personal liability protection.


Steps for Opening a Business Checking Account

Opening your business checking account can be done in four simple steps:


Do Your Research

Determine what you need your account to do and what features you’re looking for to ensure that it meets your business’s needs. You want to make sure your account is reliable and offers more than just basic features. That way you’ll have peace of mind and get more done throughout your work week. For example, free eStatements, online check images, and mobile banking are all helpful tools for monitoring your transactions.


Collect Your Documents

First, you’ll need an employer identification number (EIN). Business owners can apply for one for free through the IRS. Among other things, this number is essential to hire employees and open a business checking account. It’s matched to your business, similar to how a social security number is matched to an individual.


In addition to your EIN, you’ll need personal identification that shows the names, addresses, social security numbers, driver’s licenses, and dates of birth of all authorized signers and every owner with more than 25 percent ownership.


You’ll also need information about your business, including name, address, and trade name or DBA name (if applicable). You may also need to list your business entity type, what type of business you operate, and what industry you’re in.


Open the Account

This is a simple process and can be done online or in person. How you choose to open the account depends on your comfort level and if you would prefer to open it yourself or have someone walk you through the process in person.


Make Sure Everything Is Correct

Once you’ve opened the account, make sure everything in the account documents and checks is correct, such as your business name. Once your account is established, make sure to keep an eye on your transactions to make sure money is coming in and going out smoothly.


Invest in a Reliable Checking Account for Your Business

Now that you know what you can do with a business checking account and how easy it is to open one, it’s important to explore your business account options—including checking, savings, loans, and other services—to ensure you have a reliable account for your business.