How To Open A Business Bank Account
Opening a business bank account may look daunting, but it is a systematic and straightforward process. You need to know the prerequisites and arrange the necessary documents and information.
In this Aniday's guide, we will walk you through the steps from identifying the requirements to effectively opening and funding your business bank account.
How To Open A Business Bank Account?
The process of opening a business bank account may look complex. But if you know all the essential requirements and needs and arrange the documents, opening a business bank account will be a piece of cake for you.
So, let's discuss the steps to open a business bank account!
Set Your Business Banking Requirements
Depending on your business, you may need a specific business bank account that supports your transactions. Therefore, make a list of must-have features to help you narrow down your options. Here are some other factors you need to consider when choosing the ideal business bank account:
- Customer support: Check out different customer support services, working hours, communication options, and how well they handle your queries and problems.
- Fees: Each business bank account may charge a specific monthly fee, minimum account balance fees, early termination fees, or even fees for particular transactions. Therefore, be aware of whether you can afford to pay it.
- Interest rates: Banks impose different types of interest rates, such as rates for savings, checking, lines of credit, etc. Therefore, ensure you are comfortable with the rates based on your requirements.
- Transaction and deposit limits: Generally, business bank accounts have daily, monthly, and per-transaction limitations for both deposits and withdrawals. However, when you hit the limit, certain banks may charge a fee or even stop further transactions.
- Type of transactions you can do: A specific business bank account allows only a particular set of transactions. For example, if you want to make transactions such as cash, ACH, cheque, wire transfers, pay recurring bills, or access insured sweep services, you must choose the account supporting these requirements.
Compare Your Hand-Picked Business Bank Accounts
Initially, you can choose a couple of business bank account options at different places in your state or country. Then, you can filter out and compare the best options that fulfill your requirements. For example, you can list each bank's pros, cons, and services and choose the best fit for your requirements.
Gather The Essential Documents
Before applying for a business bank account, you must know the required documents to complete the procedure. However, they may differ from one bank to another and from the type of business bank account you want to open.
Banks need specific personal information and documents before opening a bank account. Generally, this personal information is used to verify your identity, two-factor authentication, and communication. Here's a breakdown of personal documents and information you need to open a business bank account:
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Personal documentation:
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Government-issued photo ID
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Personal information:
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Date of birth
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Home mailing address
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Personal email
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Personal phone number
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Social Security number
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Apart from the required personal information, there are also some required business information and documents you need to submit. These details help to prove your business identity. Here are the necessary business documents and information you need to submit:
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Business documentation: The type of the required business documents depends on your business and requirements. But here's a quick breakdown based on the standard business types:
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Sole proprietorships: |
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LLCs (Limited Liability Companies): |
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Partnerships: |
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Corporations: |
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Business information:
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Business address and phone number
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Business entity type (sole proprietorship, partnership, LLC, or corporation)
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Business name
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Date your business was formed
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Employer identification number (if you have one)
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Estimated monthly transactions
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Industry and type of business you operate
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Trade name or doing business name (if applicable)
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Set Up Your New Business Account
Setting up your new business account takes time once you submit the essential information and documents. Generally, once the procedures are complete in your business bank account, you must fund and set up your account.
When funding your business account, you need to remember some points. They include:
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Some business bank accounts can be opened with $0 or may even need an opening deposit, which may differ depending on your bank.
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Avoid having a higher opening deposit.
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Check whether your bank offers a business bank account with a sign-up bonus and the days required to complete the deposit.
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Obtain the required business bank materials such as debit or credit cards, cheques, etc.
Once you have opened and funded your business bank account and funded, it's time to set up your account through the bank’s app or official website. Here are the steps to set up your business bank account:
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Download your bank's mobile app
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Log in to the online banking platform by entering the credentials and changing them if required.
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Add authorized users to your business bank account with ideal user permissions.
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Ensure to set up recurring payments.
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Be sure to set up relevant notifications and account alerts.
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You can connect your business bank account to your business accounting software or any other tools if required.
Benefits Of Opening Business Bank Accounts
Opening a business account is a safer option to separate your business and personal space. Therefore, here are the benefits of opening a business bank account for your business:
- Ability to use the credit facilities if required or in an emergency.
- It consists of purchasing power for credit card accounts to make large purchases if needed.
- It helps to build an adequate transaction history for your business.
- It assists with limited personal liability protection to keep your business funds separate from personal funds.
- It is a professional approach to building an authorized business platform for you.
Final Thoughts
In conclusion, following these steps can open a business bank account quickly. The steps may vary depending on the type of business bank account you want to open and the bank, but knowing them will give you more confidence and insight into what you need to do.
We hope this guide helped you understand how to open a business bank account!
