How to Open Your Small Business Bank Account

There are milestones every small business owner will reach that are worth celebrating.

One of our favorite milestones? Opening a dedicated small business bank account!

Though this step carries significant weight in shaping the path your venture takes, it is a surprisingly straightforward process. If you’re not sure where to start, you’ve come to the right place. Here’s a breakdown of how to open your small business bank account.

What is a business bank account?

A business bank account is a specialized financial account designed for businesses and organizations to manage their finances separately from personal accounts. It offers features tailored to business needs, such as the ability to process business-related transactions, manage cash flow, accept payments, and track expenses.

Why should I open a bank account for my small business?

There are numerous great reasons to open a bank account for your small business.

1. Maintaining separate finances: Operating a business account ensures a clear distinction between personal and business finances, promoting financial organization and transparency.
2. Shielding from personal liability: A business account provides a layer of legal protection by isolating business-related transactions from personal assets, safeguarding your personal finances in case of legal issues or debts.
3. Facilitating business growth: Business accounts offer streamlined financial operations, enabling smooth scalability and expansion by providing a clear overview of business revenues, expenses, and profits.
4. Diverse payment processing options: Business accounts provide various payment processing options, allowing you to accept payments through a range of methods like checks, direct deposits, and debit and credit cards.
5. Access to essential business services: Operating a business account opens doors to a wider array of business services, which can simplify operations and provide valuable support for various aspects of your company.

In short, a business bank account helps you keep your finances better organized and gives you access to services and options that can help your business thrive and grow.

How to Open a Small Business Bank Account

Business finances can seem intimidating, but luckily, opening a business bank account is a straightforward process, much like opening a personal account!

1. Choose your bank.

Research credit unions and banks in your area that offer business banking services. You can start with the institution with which you do your personal banking, but don’t be afraid to branch out and explore others. Compare their account types, fees, features, and customer reviews to find the best fit for your business.

Here are a few tips to keep in mind when looking at banks:

• Consider your business needs: Think about your business’s financial needs. Do you need a business checking account, savings account, or both? Also consider any specific services you might require, such as merchant services, business loans, or online banking features. Even if you don’t need multiple accounts now, it’s easier to make one choice that can serve your needs in the future.
• Compare account types and their features: Visit the websites of the banks on your list and explore the business account options they offer. Compare the features, benefits, and fees associated with each type of account. Look for accounts that align with your business’s size, industry, and financial goals.
• Evaluate fees and costs: Pay close attention to the business banking fees at each institution. Common fees include monthly maintenance fees, transaction fees, and overdraft fees. A shameless plug for ourselves here: At Amplify, you’ll never pay a fee on your business deposit accounts!
• Evaluate initial deposit requirements: Many business accounts have initial deposit requirements. These can be a little as $5 or as high as several thousand, depending on the type of account. (We don’t have those either.)
• Read customer reviews or ask for recommendations: Look for customer reviews and testimonials online to get an idea of the bank’s reputation and customer service quality.

Once you find the right bank, you can dive further into their account offerings to choose the best account for your business.

2. Gather needed documents for opening a business bank account.

Here’s a general overview of what you’ll need to open a business bank account. Keep in mind that different financial institutions or account types may have different requirements. Always check with the institution before opening an account to ensure you have the right papers.

For more information on what you need to open a business bank account at Amplify Credit Union, visit this help article.

• Personal identification
  • Driver’s license or similar identification for each signer on the account
    Business identification
• Business registration or incorporation documents
  • Tax ID number or employer identification number (EIN)
  • Articles of incorporation/ certificate of formation
  • Doing business as (DBA) documentation or assumed name certificate
• Business banking history
  • Your business banking history, including your account numbers and balances (if you’ve had business accounts in the past)
• Initial deposit
  • Funds for your initial deposit (amount for required initial deposit varies depending on financial institution and type of account)

3. Visit the bank or apply online.

Typically, there are two ways to apply for a business bank account: in person or online.

Visiting a bank branch in person to open a small business bank account provides a hands-on experience and the opportunity to establish a personal connection with the institution.

Bring all necessary documents, like business details and personal identification, and approach a bank representative who will guide you through filling out application forms. Direct interactions allow you to ask questions, clarify doubts, and gain insights into account types and services.

Applying online to open a small business bank account offers convenience and flexibility.

Prepare scanned copies of essential documents, then navigate to the bank’s website to your desired account type.

From there, follow the website’s instructions for applying and uploading documents.

In some cases— like when you apply at Amplify Credit Union— you’ll be working with a virtual banker who will walk you through the process. Virtual bankers will manually review each application, work with applicants to address any issues with documentation, and are available to answer questions you have along the way. It’s the best of both worlds!

4. Get approved and fund the account.

If your paperwork is in order, the bank will approve your application and create your account. After your account has been opened, the next step is funding the account. Here, you’ll make your initial deposit, which should meet the bank and account’s minimum requirements.

5. Enroll in features and start using your account.

Once your account is officially up and running, you can begin enrolling in features and services applicable to your account. Your banker will help walk you through this process.

After you’ve done that, congratulations! You’re now ready to start using your account and experiencing the benefits of business banking.

The Next Step for Your Business

In the realm of business, the decision to open a business bank account is more than just a formality – it’s a strategic move that sets the stage for your business’s financial health and growth. By establishing clear boundaries between personal and business finances, safeguarding assets, and unlocking specialized business banking services, you’re laying down the foundation for a prosperous journey.