To open a business bank account, you need a tax ID for the business, proof that the business exists, and a government photo ID for each owner and signer. Most banks then ask a few questions about what the business does and how money will move through the account. If your paperwork is ready, the application often takes under an hour online or at a branch. Approval can take longer when the bank needs to review details.
This guide covers the documents for each business type, what accounts cost, how deposit insurance works, and the most common reasons an application stalls. Facts were checked as of October 2026.
Why keep business and personal money apart
The IRS says everyone in business must keep records that clearly show income and expenses. Its small business guide, IRS Publication 583, tells new owners to open a business checking account and keep it separate from personal money. It also suggests depositing all business receipts into that account and reconciling it every month.
The reasons are practical. A clean account makes tax deductions easy to prove if you are ever audited. It also keeps your bookkeeper from sorting grocery runs from supplier payments. For an LLC or corporation, mixing funds can weaken the legal separation between you and the company. So even a one-person LLC with a few sales a month benefits from its own account.
Business bank account requirements
Federal rules set the floor for what every bank collects. Under the customer identification rules, a bank must get a name, address, identification number and, for a person, a date of birth before opening an account. Then the bank verifies that information against documents or databases.
For companies, there is a second layer. FinCEN’s customer due diligence rule requires banks to identify and verify the beneficial owners of a legal entity. That means every person who owns 25% or more of the company, plus one person with significant control, such as a CEO or managing member. Banks can set a lower threshold if they see higher risk. In February 2026, FinCEN also told banks they no longer have to re-verify owners each time an existing business customer opens another account, unless something looks off.
The 2025-2026 change to FinCEN BOI reports
Do not confuse the bank’s questions with the separate beneficial ownership information (BOI) report to FinCEN. In March 2025, an interim rule exempted US companies from that filing. Then a final rule issued August 11, 2026, made the exemption permanent, effective August 14, 2026, according to FinCEN’s BOI page. As of October 2026, only companies formed abroad and registered to do business in a US state still file. However, your bank will still ask about owners, because the account-opening rule is a different requirement.
Documents checklist by business type
Banks differ in the exact list, so call ahead or check the bank’s site. Still, the core set looks like this for most US banks:
| Business type | Tax ID | Formation and authority documents | People to identify |
|---|---|---|---|
| Sole proprietor | Your SSN, or an EIN if you have one | DBA or assumed name certificate if you use a trade name; business license where your city or state requires it | You, with a government photo ID |
| LLC | EIN (single-member LLCs without employees may use the owner’s SSN, but many banks still ask for an EIN) | Articles of organization filed with the state; operating agreement; sometimes a certificate of good standing | Members who own 25% or more, one controlling person, and every signer |
| Corporation | EIN | Articles of incorporation; bylaws; board resolution naming who may sign on the account | Shareholders who own 25% or more, one controlling officer, and every signer |
An EIN costs nothing. You can apply online at irs.gov and get the number at the end of the session if approved. Websites that charge for an EIN are not the IRS. Also, the online tool runs only during set hours, and the session times out after 15 minutes of inactivity.
How to open a business bank account for an LLC, step by step
The steps are the same for most entity types. An LLC is the most common case, so it is used here as the example.
- Form the LLC with your state. Keep the stamped or emailed articles of organization. The name on the account must match the filed name exactly.
- Get an EIN. The IRS says a single-member LLC with no employees does not strictly need one for federal tax. Still, it can get one voluntarily to open a bank account, and most owners do.
- Sign an operating agreement. Some states do not require one, but banks often want to see who owns what and who can act for the company.
- Collect owner IDs. Each owner at 25% or more and each signer needs a valid photo ID and a home address.
- Pick the account type and apply. Answer the questions about expected deposits, cash use and international payments honestly. Those answers set what the bank considers normal activity.
- Fund the account. Some accounts require an opening deposit. The amount varies by bank and account.
Once the account is open, many owners set up card acceptance next. Our guide to how a merchant account works explains that part.
Types of business accounts
- Business checking. The everyday account for deposits, card spending, transfers and bill payments. Most businesses start here.
- Business savings or money market. Holds tax reserves or an emergency cushion and usually pays some interest, with limits on withdrawals set by the bank.
- Certificates of deposit. Fixed term, fixed rate, with a penalty for early withdrawal.
- Merchant services and payroll add-ons. Not accounts in themselves, but often set up right after checking.
Business bank account cost and typical fees
There is no standard price, because each bank sets its own schedule. In practice, these are the fees to compare:
- Monthly maintenance fee. Often waived if you keep a minimum balance or meet an activity target.
- Transaction limits. Many accounts include a set number of free transactions per month, then charge per item.
- Cash deposit fees. Common above a monthly cash limit, which matters for shops and restaurants.
- Wire fees. Usually higher for outgoing and international wires.
- Overdraft, returned item and paper statement fees.
Before you sign, ask for the full fee schedule and run your expected month through it. For example, a cafe that deposits cash daily may pay more on a no-monthly-fee account than on one with a fee that includes cash handling.
FDIC insurance limits for business deposits
The FDIC standard insurance amount is $250,000 per depositor, per insured bank, for each ownership category. Credit unions have similar coverage through the NCUA. How a business is covered depends on its structure.
- Corporations, partnerships and LLCs fall in their own category. All of the company’s deposits at one bank are added together and insured up to $250,000, separately from the owners’ personal accounts.
- Sole proprietorships are not a separate legal entity, so the FDIC treats those deposits as the owner’s single accounts. That means your business account and your personal account at the same bank share one $250,000 limit.
Also, FDIC insurance covers deposits only if the bank itself fails. Investments, crypto and the failure of a non-bank app that holds your money are not covered. If a business keeps more than $250,000, it can spread funds across banks or ask about sweep programs.
Online vs branch opening
Online applications are faster to start, and many banks let you upload documents and verify ID with a phone camera. However, online flows can be strict about mismatches, such as an old address on your ID. Some also limit who can apply online, for example multi-owner companies or businesses that handle lots of cash.
A branch visit takes more time but lets a banker review unusual paperwork on the spot. It also helps when several owners must sign together. If your structure is simple, online usually works well. If it has layers, such as an LLC owned by another company, a branch or a business banker call is often quicker in the end.
Common reasons applications are delayed
- Name mismatch. The legal name, the DBA and the name on the EIN letter do not match exactly.
- Missing owners. A 25% owner was left off, or a parent company’s owners were not listed.
- Expired or unreadable ID.
- Unclear business activity. A vague description, no website, or answers that do not match the industry.
- Higher-risk features. Heavy cash, foreign owners, or regular international wires lead to more questions.
- State filing not yet active. The bank cannot find the entity in the state’s records.
Most of these are fixed by checking every document against the filed name before you apply. For more on running the money side of a small company, see our money and business guides.
This article is general information, not financial or legal advice.
Read next
- What Is a Merchant Account and How Does It Work
- Payment Gateway vs. Payment Processor: How Card Payments Work
Frequently asked questions
Can I open a business bank account without an EIN?
Yes, a sole proprietor can usually open one with an SSN. A single-member LLC with no employees may also qualify, but many banks still ask for an EIN, and it is free from the IRS.
How much money do I need to open a business bank account?
It depends on the bank and account. Some accounts have no minimum opening deposit, while others require one or charge a monthly fee unless you keep a set balance.
Do I still need to report beneficial owners to FinCEN in 2026?
Not if your company was formed in the US. A final rule made that exemption permanent in August 2026. Your bank will still ask about owners when you open the account.
Is a business bank account FDIC insured?
Yes, if the bank is FDIC insured. An LLC or corporation gets up to $250,000 per bank in its own category. A sole proprietor’s business deposits share the owner’s personal $250,000 single-account limit.
How long does it take to open a business bank account?
With documents ready, the application often takes under an hour. Review can add a few days if the bank needs more detail on owners or activity.
Have a question about this topic? Ask in the comments below. Our editors read every comment and answer questions here, and we add useful answers to the guide.
Sources
- irs.gov/publications/p583
- irs.gov/businesses/small-businesses-self-employed/get-an-employe…
- irs.gov/businesses/small-businesses-self-employed/single-member-…
- fincen.gov/resources/statutes-and-regulations/cdd-final-rule
- fincen.gov/system/files/2026-02/FinCEN-Order-CCDExceptiveRelief.pdf
- fincen.gov/boi
- ecfr.gov/current/title-31/subtitle-B/chapter-X/part-1020/subpart-…
- fdic.gov/resources/deposit-insurance/understanding-deposit-insurance
- fdic.gov/resources/deposit-insurance/financial-products-insured
- fdic.gov/financial-institution-employees-guide-deposit-insurance/…