How to Open a Business Bank Account for Your LLC?

After establishing your LLC, the second and most important task afterward is getting your EIN (federal tax ID number or federal employer ID number) from the IRS. You need this to open a business bank account to prove you’re subjected to federal taxation.

The main purpose of an LLC and opening a separate account is to separate your business account as an entity on its own from your personal account and protecting your personal liability.

Why separate your business account from your personal account?

As a startup, it may seem easier to mix your business expenses and finances with your personal expenses but this is a big mistake and ruins the purpose of limited liability protection of an LLC.

You need to separate your business expenses from your personal expenses, and make sure the two never mingle. If you do mix them, you become personally liable for anything that happens in the business in terms of debts, loans, and all legal obligations.

And so never use your personal account for business expenses, and vice versa. Start your business with a professional approach and create a separate account for business needs.

What are the benefits of having a Business Bank Account?

  • Better and easier financial bookkeeping
  • Integrate your bank account with your accounting software to faster calculate taxes, expenses, etc.
  • Audit your business expenses (without needing to separate your personal expenses from the calculations)
  • Track all business expenses and income
  • Reflect professionalism by using business checks with partners or clients instead of personal checks
  • Form a professional relationship with your bank which can be of value in the future in terms of lines of credit or small business loans.

How to set up your LLC’s Business Bank Account?

Step #1: Choose a suitable Bank to set a business account:

There are a ton of banks out there, each with their own set of advantages and disadvantages. When choosing a bank, you want to make sure they have flexible opening hours, great customer service, and most importantly, they have multiple branches and ATMs within your area.

Also, if you already have a relationship with a certain bank and one you’re familiar with, it’ll make the transition to a business account easier because you’d already be aware of most of their policies.

This can also come in handy in the future if you need financial assistance and preserve a clear credit history, with bank loans and credit for your business. Some other important factors to check are:

  • Is the initial deposit within your budget?
  • Is there a minimum balance requirement to avoid monthly fees? Many Banks offer free business accounts as long as you meet the minimum balance.
  • Are there any transactions fees? Monthly fees? Annual fees? Service fees? There is usually a transaction fee when wire transferring money, domestically or internationally, as well as an ATM fee when you use an out-of-network ATM. All Banks have service fees too, just be sure you know what they are and when you’ll be charged.
  • Does the bank have a mobile app? Or can you easily use their website via mobile?
  • If so, does the bank software integrate with your accounting and bookkeeping software?

Some popular candidates are Wells Fargo, TD Bank, Bank of America, and Citizens Bank. For example, Wells Fargo has the largest number of banks in the U.S. while TD Bank opens on Sundays and is dominant in the east coast.

There’s also Azlo, a free online bank that doesn’t charge monthly fees, transaction fees, or the usual banking fees but it doesn’t have checks or cash deposits which may be inconvenient for businesses.

Each bank differs from the other. Before settling on a bank, do your research, and find a bank that meets all your business needs so you’ll be comfortable in the future.

Step#2: Choose your bank account type:

There are two different account types, a savings account and a checking account. A saving account is like an investment with earning interest every month and a checking account is a current one where you can make cash deposits and withdraws with a debit card and money transfers as well.

Even though a savings account will help increase your funds, it can be restricting because you won’t be able to access these funds for a certain period, whether it is three months or a year, depending on the agreement.

There are multiple types of savings account, a high-yield account that allows for monthly interest, a CD account which allows for a higher interest rate and an MMA (Money Market Account) which is considered a safe investment but has a lower interest rate.

A savings account can come in handy in the future if you need funds for your business – as it can add to your savings.

But withdrawing the money before the agreed-on period may result in a costly withdrawal fee. A checking account is usually the best option with a business because it allows for checks and flexible money transfers and deposits.

Some business set both account types, a checking one for business expenses and transactions then a savings one for funds.

Step #3: Find out the requirements for a business account:

Opening a bank account for an LLC (Limited Liability Company) is different than opening a personal account. Since it is separate from its owners and their personal liability, you won’t be held accountable for business obligations, debts, or other troubles that may follow a startup.

It’s always good to do your research and have all your documents prepared before heading to the bank to open an account, just so you don’t have a wasted trip without accomplishing anything.

We’ve gathered all the requirements for opening a business account, however, they may slightly vary from one state to another, and they are:

  • Your LLC’s Certificate of Formation or articles of organization. This is the legal state approval that shows that your business is approved by the state. It states the business name and address; every bank/ union requires this form.
  • EIN (Employer Identification Number) or the federal taxpayer ID number. This is issued from the IRS, proving your business is subjected to federal taxes.
  • Your LLC Operating Agreement. This is to prove your ownership to the business and that you’re authorized to open an account on the business’s behalf.
  • The Business address and mailing address. Your business’s address is required and it cannot be a mailbox address or a PO Box address; the federal banking regulations demand a physical street address to open a bank account.
  • Personal Identification of the owner. The owner(s) need to provide valid government-issued ID to open an account. This can be your driver’s license, SSN card, passport, etc.

Step #4: Start doing business!

By deciding on these steps beforehand, your trip to the bank should be a breeze! You’ll have an idea of cost, account types, and you’ll have the required documents.

You’ll be able to order a debit card to use at ATM’s and a checkbook to write out checks.

You can also apply for a credit card if needed. Be sure to ask about all the advantages that come with your account when setting it up!


It is very important to keep your personal account separate from your business account, to avoid liability issues and unwanted confusions when calculating taxes and business expenses.

Save yourself the trouble in the future and do things the right way from the start.

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