Once your business is ready to “go live” and commence operations, you’ll need to find a good bank and open a business bank account. To start off, you’ll probably only need one business bank account - typically, a business checking account.
You’ll want to find a bank that is reputable, convenient, accessible and offers no or low fees on your business checking account. You’ll also want a bank that has dedicated representatives or an account team that are responsive should you run into any issues with your account and/or need to discuss additional banking services and resources.
Some business owners opt to open business accounts at banks that handle their personal accounts. There are generally no issues with doing this and in fact, it may be easier to open a business account at a bank that already handles your personal banking especially if you have a good relationship and standing with the bank. However, keep in mind that the bank may not offer the best rates when it comes to fees on business accounts, so it is still best to do comparison shopping at other banks. You don’t want to pay exorbitant monthly bank fees on your business checking account at a time when you are just getting started nor as your business continues to grow.
The bank should have branches that are convenient to your business location. Some banks offer remote deposit capabilities, so you do not need to make deposits at a branch. However, there are usually equipment, monthly service and transaction fees for remote deposits, so you’ll need to research those costs. Most banks will offset monthly bank fees based on the monthly average balance maintained in your account and/or if you maintain a minimum monthly average balance.
Banks typically have a selection of tiered account offerings. When choosing an offering, be sure to inquire with the bank on what bank fees are applicable for the respective offering (request a bank rate card, if available), how you can reduce or eliminate your monthly bank fees (ex: maintain minimum monthly average balance) and what is included as part of the offering (ex: number of monthly transactions at no additional fee, number of checks that you can write per month with no additional fee, are incoming and outgoing ACH/Wires included and if so, how many?, do you get free checks? do you get free official bank checks?, etc.). The key is to get the most bang for your buck!
As your business and business needs continue to grow, you may consider opening an additional account like an interest-bearing business savings account. A business savings account is useful if you tend to be cash heavy and want to earn a little interest in a FDIC insured account while your cash remains idle. Interest rates are still low so don’t expect to earn a lot of interest, but it’s a good way to earn some passive income on that idle cash. Just keep in mind that each additional bank account may incur additional monthly bank fees, so you’ll want to make sure you can find ways to offset those additional costs.
To open a business bank account, you’ll typically need your business Employer Identification Number (EIN) or Federal Taxpayer ID number (FTIN or TIN) – some banks may ask for a copy of the IRS Form SS-4, a copy of your Articles of Formation (LLCs) or Articles of Incorporation (Corporations), DBA name and registration (if applicable), business and ownership information (ex: business address & telephone, name of owners, ownership stake), credentials of business owners and authorized signors on the account, copy of the Operating Agreement (LLCs) or copy of the Corporate Bylaws (Corporations), corporate resolution (Corporation) or other permitted document(s) authorizing certain individuals to open a business account on behalf of the business and so forth. It is best to check with your bank to determine exactly which documents and what information they require to open and setup an account. While the process may seem tedious, banks must use due diligence to prevent fraud. That said, a good bank should work with you and your business as a partner throughout the process to make it as smooth and fluid as possible.