What banks ask for before they open an account

Most banks need three things before they will open a business account: proof that your business exists as a legal entity, identification for the person signing the account paperwork, and a deposit to start the account. The exact documents vary by bank and by the type of business structure you have, but the pattern is the same across all of them.

Banks are required by federal law to verify your identity and check you against lists of people and businesses they cannot do business with. This is called Know Your Customer (KYC) compliance. It means every bank will ask for the same basic categories of proof, even though the specific documents differ.

The deposit requirement ranges from $25 to $500 depending on the bank and account type. Some banks waive the minimum if you set up direct deposit or keep a certain balance. Online banks often have lower minimums than brick-and-mortar branches.

Key Takeaways

  • You will need an Employer Identification Number (EIN) from the IRS, a business license or registration document from your state, and a government-issued ID for the owner or authorized signer.
  • Sole proprietorships can sometimes open a business account using a Social Security Number instead of an EIN, but most banks now require an EIN regardless of structure.
  • The initial deposit requirement is usually $25 to $500, and some banks waive it if you set up payroll direct deposit or maintain a minimum balance.
  • Bring originals or certified copies of documents to a branch, or upload scans to an online bank; some banks will not accept photos taken on a phone.
  • The account opening process takes one to three business days if you apply online, or same-day if you visit a branch in person with all documents.

Documents you need for your business structure

The documents required depend on whether you are a sole proprietor, partnership, LLC, S-corporation, or C-corporation. Each structure is treated differently by the IRS and by state governments, and banks follow those distinctions.

If you are a sole proprietor operating under your own name, you need your Social Security Number or EIN, a government-issued photo ID, and proof of your business address (a utility bill or lease in your name works). Some banks will open the account the same day. If you are operating under a doing business as (DBA) name, you will also need a copy of your DBA registration from your county or state.

If you have formed an LLC, partnership, or corporation, you need the Articles of Organization, Articles of Incorporation, or partnership agreement filed with your state. You also need an Employer Identification Number (EIN) from the IRS. You can get an EIN for free at irs.gov; it takes about 15 minutes online and you receive it immediately. You will also need a government-issued photo ID for the person authorized to sign on the account.

Nonprofits need their IRS Form 1023 or 1023-EZ approval letter (proof of tax-exempt status), their Articles of Incorporation, bylaws, and an EIN. Some banks also ask for a board resolution authorizing the account opening.

Identification and ownership documentation

The person who signs the account paperwork must provide a government-issued photo ID. A driver's license, passport, or state ID card all work. The ID must not be expired, though banks sometimes accept IDs that expired within the last year.

If the business has multiple owners, the bank will ask for ID from each owner and may require all of them to sign the account agreement. Some banks allow one owner to sign on behalf of the others if you provide a corporate resolution or partnership agreement showing that person has authority to do so. Ask the bank before you arrive whether all owners must be present.

Banks also verify the owner's address. They will ask for a recent utility bill, lease, mortgage statement, or government correspondence showing your name and current address. A bill dated within the last 60 days is standard.

The Employer Identification Number (EIN) and why banks require it

An EIN is a nine-digit number the IRS assigns to businesses for tax purposes. It works like a Social Security Number for your business. Almost all banks now require an EIN for any business account, even if you are a sole proprietor. Some banks still allow sole proprietors to use a Social Security Number, but this is becoming rare.

Getting an EIN is free and takes 15 minutes. Go to irs.gov, click "Apply for an EIN Online," and answer questions about your business structure, location, and what you do. You receive the number immediately and can use it the same day. The IRS will also mail you a confirmation letter, which some banks ask to see.

If you already have an EIN from a previous business or from filing taxes, you can use that number. Do not apply for a new one unless you have formed a new legal entity. Applying for multiple EINs for the same business can trigger IRS notices.

Business registration and license documents

Banks need proof that your business is registered with your state or local government. The document that proves this depends on your structure and where you operate.

For an LLC or corporation, bring a certified copy of your Articles of Organization or Articles of Incorporation filed with your state's Secretary of State office. You can download this from your state's website or request a certified copy for a small fee (usually $5 to $15). Some banks accept a photocopy; others require a certified copy with the state seal.

For a sole proprietor or DBA, bring your DBA certificate or business license from your county or city. If you have not registered a DBA, some banks will still open an account if you provide your Social Security Number and proof of address, though they may flag the account as a sole proprietorship rather than a registered business.

For a partnership, bring a copy of your partnership agreement and the state registration if your state requires one. For a nonprofit, bring your IRS information letter showing your tax-exempt status, your Articles of Incorporation, and your bylaws.

Initial deposit and minimum balance requirements

Most banks require an opening deposit of $25 to $500. The amount depends on the bank and the type of account. A basic business checking account often has a lower minimum than a money market or savings account.

Some banks waive the minimum deposit if you set up direct deposit for payroll or if you maintain a certain average balance each month. Chase, for example, waives the opening deposit for some business accounts if you set up payroll direct deposit within 30 days. Bank of America requires a $500 opening deposit for most business checking accounts but waives it if you maintain a $5,000 average balance.

Online banks like Mercury, Novo, and Brex often have no opening deposit requirement at all. This can save you money if you are just starting out and do not have cash on hand.

How long the process takes and what happens next

If you apply online, the bank will review your documents and contact you within one to three business days. They may ask follow-up questions about your business or request additional documents. Once approved, the account opens and you can start using it immediately, though checks may take five to seven business days to arrive.

If you visit a branch in person with all documents, you can often open the account the same day. The banker will verify your ID, review your business documents, process your opening deposit, and give you temporary checks or a debit card before you leave.

After the account opens, the bank will send you a welcome packet with your account number, routing number, and online banking login information. You can set up bill pay, transfers, and payroll processing through your online dashboard or by calling the bank.

Frequently Asked Questions

Can I open a business account without an EIN?

Most banks now require an EIN for any business account, even for sole proprietors. A few banks still allow sole proprietors to use a Social Security Number, but you should call ahead to confirm. Getting an EIN is free and takes 15 minutes online, so it is easier to get one than to search for a bank that does not require it.

What if I do not have a business license yet?

If you have not registered your business with your state or local government, you can still open an account as a sole proprietor using your Social Security Number and a DBA certificate (if your area requires one). However, you will need to register your business eventually for tax and legal purposes, so it is worth doing before you open the account.

Do I need to bring original documents or can I send copies?

Online banks usually accept scans or photos of documents uploaded through their website. In-person banks typically want to see originals or certified copies. Ask the bank before you apply whether they accept photocopies or phone photos, as policies vary.

How much money do I have to deposit to open the account?

The opening deposit ranges from $0 to $500 depending on the bank. Online banks often have no minimum. Traditional banks usually require $25 to $500. Some banks waive the minimum if you set up payroll direct deposit or maintain a certain balance.

What if the bank rejects my application?

Banks can reject a business account application if documents are incomplete, if there is a mismatch between your ID and your business registration, or if you have a history of fraud or unpaid debts. Ask the bank why the application was denied and what you can do to fix it. You can also try a different bank, as policies vary.