The main choices are traditional banks, credit unions, and online banks
You can open a business bank account at a traditional brick-and-mortar bank, a credit union, or an online-only bank. Each route has different requirements, fees, and what you get for your money. Traditional banks usually require you to visit in person and bring documents; credit unions often have lower fees but membership rules; online banks have the lowest fees and fastest signup but no physical branch if you need to deposit cash or speak to someone face-to-face.
The choice depends on what you actually do with the account. If you deposit checks and cash regularly, you need either a physical location or a relationship with a bank that lets you use ATMs and deposit machines. If you mostly send invoices and pay bills online, an online bank works fine and costs less.
Key Takeaways
- Traditional banks require an in-person visit, government ID, and proof of business registration, but offer deposit machines and teller service.
- Credit unions often charge lower monthly fees and have lower minimum balances, but you must be a member and membership rules vary by location.
- Online banks have no monthly fees for most accounts and open in minutes, but you cannot deposit cash in person and customer service is phone or chat only.
- You will need your Social Security Number or EIN, a government ID, and proof your business exists — usually a business license, articles of incorporation, or a DBA filing.
- Comparing the actual fees you will pay (monthly maintenance, per-check, wire transfers, overdraft) matters more than the bank's name or size.
What documents you need before you walk in or click sign up
Every bank asks for proof that your business is real. For a sole proprietorship, that is usually a business license or a DBA (Doing Business As) filing from your state or county. For an LLC or corporation, bring your articles of incorporation or formation — the document you filed with your state's Secretary of State office. If you do not have formal registration yet, some banks will open an account under your personal name and let you add the business name later, but this is slower and less common.
You will also need a government-issued ID (driver's license or passport) and your Social Security Number or EIN (Employer Identification Number). If your business has an EIN, use that instead of your SSN — it is safer and cleaner for business purposes. You can get an EIN free from the IRS website in minutes if you do not have one yet.
Bring your most recent business address, phone number, and the names and ownership percentages of all owners if there is more than one. Some banks ask for a personal tax return or business tax return to verify income, especially if you are opening a business line of credit at the same time.
Traditional banks: in-person, full service, higher fees
A traditional bank like Bank of America, Wells Fargo, Chase, or a local community bank requires you to visit a branch in person. You bring your documents, meet with a banker, and they verify everything on the spot. The account usually opens the same day or within 24 hours. You get a debit card, checks, and access to deposit machines and tellers.
Monthly fees range from $10 to $30 depending on the bank and account type. Some banks waive the monthly fee if you keep a minimum balance (often $1,000 to $2,500) or if you set up direct deposit. Per-check fees, wire transfer fees, and overdraft fees add up if you use them often. Ask the banker for a fee schedule before you sign anything.
The advantage is convenience: you can deposit cash and checks at any branch or ATM, call a local number and reach someone who knows your account, and get a business credit card or line of credit more easily. The disadvantage is cost — you pay for services you might not use, and the minimum balance requirement ties up money.
Credit unions: membership required, lower fees, limited locations
A credit union is a nonprofit bank owned by its members. To open an account, you must first become a member, which usually means living or working in a certain area, belonging to an employer, or joining an organization the credit union serves. Membership is free or costs a small one-time fee ($5 to $25).
Credit unions typically charge $5 to $15 per month for a business account, or nothing if you keep a small balance. They rarely charge per-check fees and often charge less for wire transfers than traditional banks. The catch is that credit unions have fewer branches and ATMs — if you need to deposit cash, you may have to travel or use a partner network.
To find a credit union you can join, search the CO-OP Network or Alliant Credit Union's locator tool online. Call the credit union and ask if you meet their membership rules before you visit. Bring the same documents as you would to a traditional bank.
Online banks: no fees, fastest signup, no cash deposits
An online bank like Novo, Mercury, Brex, or Square has no physical branches. You sign up on their website or app, upload photos of your documents, and the account opens in minutes to a few hours. There are no monthly fees, no minimum balance, and no per-check charges. Wire transfers and ACH transfers (moving money between banks) are free or very cheap.
The tradeoff is that you cannot deposit cash in person. You can deposit checks by taking a photo with your phone and uploading it, or by mailing them in. If your business receives a lot of cash, an online bank alone is not enough — you would need a second account at a bank with a physical location, or a relationship with a check-cashing service.
Online banks also offer fewer services. You cannot get a business credit card or a line of credit from most of them. Customer service is by phone, email, or chat — there is no branch to walk into if something goes wrong. But if you are a solo business that invoices customers and pays bills online, an online bank is the cheapest and fastest option.
Comparing fees across the three types
| Cost | Traditional Bank | Credit Union | Online Bank |
|---|---|---|---|
| Monthly maintenance | $10–$30 | $5–$15 (or free) | $0 |
| Minimum balance to waive fee | $1,000–$2,500 | $500–$1,500 | None |
| Per-check fee | $0.10–$0.50 each | Usually $0 | $0 |
| Wire transfer (outgoing) | $15–$30 | $5–$15 | $0–$10 |
| Overdraft fee | $25–$35 | $15–$25 | $0–$15 |
The actual cost depends on how you use the account. If you write 50 checks a month and keep a low balance, a traditional bank with per-check fees will cost you more than a credit union. If you never write checks and do everything online, an online bank costs nothing. Call or visit the website of each bank you are considering and ask for their full fee schedule — do not rely on what the website says, because fees change and websites are often out of date.
Steps to open the account
At a traditional bank: Find a branch near you, call ahead to ask what documents to bring, visit in person with your ID and business documents, meet with a banker, sign the account agreement, and receive your account number and debit card on the spot or by mail within a week.
At a credit union: Search for a credit union you can join, call to confirm you meet membership rules, visit a branch or complete membership online, then open the business account using the same process as a traditional bank.
At an online bank: Go to the bank's website, enter your business name and address, upload photos of your ID and business documents, verify your identity (usually by answering security questions or confirming a small deposit), and receive your account number and routing number by email within minutes to a few hours.
Frequently Asked Questions
Can I open a business account if I do not have an EIN yet?
Yes. You can use your Social Security Number instead, though an EIN is safer and cleaner for business. You can get an EIN free from the IRS website in minutes without leaving home. Some banks ask you to get an EIN before opening the account; others let you add it later.
What if I have bad personal credit?
Most banks do not run a hard credit check for a business account — they check ChexSystems (a banking history database) instead. Bad personal credit usually does not stop you from opening a business account. If a bank denies you, ask why and try a credit union or online bank, which often have looser requirements.
How long does it take to open an account?
Online banks open in minutes to a few hours. Traditional banks and credit unions usually open the same day if you visit in person with documents, or within 1 to 3 business days if you apply online. Some banks hold new accounts for a few days before you can withdraw money.
Do I need a separate business account, or can I use my personal account?
You can legally use a personal account, but a business account keeps your finances separate, makes taxes easier, and looks more professional to customers and lenders. Most banks require a business account if you are an LLC or corporation.
What if I need to deposit cash but I choose an online bank?
You can open a second account at a traditional bank or credit union just for cash deposits, or use a check-cashing service or retail location (like Walmart or CVS) that deposits cash into your account. Some online banks partner with retail networks for cash deposits — ask before you sign up.