Banks, credit unions, and online-only institutions all offer business checking accounts, and your choice depends on whether you need in-person service, lower fees, or faster account setup
You can open a business checking account at a traditional bank branch, a credit union, or an online bank. Each route has different speed, cost, and service trade-offs. Traditional banks let you walk in and speak to someone; credit unions often charge lower fees but require membership; online banks open accounts in minutes but offer no physical location to visit. The right choice depends on how much hands-on help you need and what fees matter most to your business.
Before you choose where to open an account, gather your business documents: your Employer Identification Number (EIN) or Social Security Number if you're a sole proprietor, a copy of your business license or formation documents, and a government-issued ID. Some institutions ask for a business plan or recent tax returns, though most do not require them for a new account. Having these ready speeds up the process whether you apply online or in person.
Key Takeaways
- Traditional banks offer in-person service and branch access but typically charge monthly fees ranging from $10 to $30 depending on the bank and account type.
- Credit unions usually charge lower monthly fees or none at all, but you must be a member first, which takes an extra step and sometimes requires a small deposit.
- Online banks open accounts in minutes and often have no monthly fees, but you cannot deposit cash or speak to someone in person.
- You will need your EIN, business license or formation documents, and a government ID to open an account at any institution.
- Account opening typically takes 24 hours to one week depending on the bank and whether you apply online or in person.
Traditional banks: in-person service and established locations
National banks like Chase, Bank of America, Wells Fargo, and regional banks in your area all offer business checking accounts. You can walk into a branch, speak to a business banker, and often open an account the same day. The banker can answer questions about which account type fits your business size and answer questions about services like merchant processing or payroll.
Monthly fees at traditional banks range from $10 to $30, depending on the bank and the account tier. Some waive the monthly fee if you maintain a minimum balance (often $1,000 to $5,000) or set up direct deposit. Many also charge per-check fees, wire transfer fees, and overdraft fees, so read the fee schedule before you commit. The trade-off is convenience and personal service; the cost is higher than credit unions or online banks.
Opening an account in person takes 15 minutes to an hour. You will need your EIN, business license, and ID. Some banks ask for a business address and phone number. If you open online through the bank's website, the process takes 24 to 48 hours, and you may need to verify your identity by uploading documents or answering security questions.
Credit unions: lower fees and member-only access
Credit unions are member-owned cooperatives that often charge lower fees than traditional banks. Many offer business checking with no monthly fee or a fee as low as $5 to $10. Some credit unions waive fees entirely if you maintain a small balance or set up direct deposit. The catch is that you must be a member first, which usually requires a small deposit (often $25 to $100) into a savings account.
To join a credit union, you must meet their membership criteria. Some are open to anyone in a geographic area; others require you to work for a specific employer, belong to a union, or live in a certain county. Search for credit unions in your area using the CO-OP Network locator or your state's credit union league website. Once you confirm you are may be able to access, you can join in person or online, then open a business checking account.
The membership step adds one to three days to the process, but the lower ongoing fees often make it worth it if you plan to keep the account open for years. Credit unions also tend to be more flexible with small businesses that have irregular income or shorter credit histories. However, they typically have fewer branches and ATMs than national banks, so consider whether you need physical access to deposit cash.
Online banks: fastest setup and lowest or no monthly fees
Online-only banks like Novo, Mercury, Brex, and others open business checking accounts in minutes, often with no monthly fee. You apply on their website or mobile app, upload your documents, and receive account details within hours. There is no membership requirement and no minimum balance. The entire process happens digitally.
The main limitation is that you cannot deposit cash in person. Most online banks accept checks by mobile deposit (photograph the check through the app) and ACH transfers from other accounts. Some partner with ATM networks so you can withdraw cash, but deposit options are limited. If your business receives cash payments regularly, an online bank alone may not work; you would need a second account at a bank with physical branches.
Online banks often have lower or no monthly fees because they have no branch overhead. Some charge for wire transfers, expedited transfers, or other services, but basic checking is usually free. They are a good fit for businesses that operate entirely online, receive payments by card or bank transfer, and do not need to deposit physical checks or cash regularly.
What documents you need to bring or upload
| Document | Why it matters | Where to get it |
|---|---|---|
| Employer Identification Number (EIN) | Identifies your business to the IRS and the bank. Required for all business accounts except sole proprietorships using a Social Security Number. | IRS.gov or apply at your local IRS office |
| Business license or formation documents | Proves your business is registered and legal. Banks use this to verify the business name and structure. | Your state's Secretary of State office or local business licensing office |
| Government-issued ID | Verifies your identity. Required for all account holders. | Driver's license, passport, or state ID |
| Business address and phone number | Banks use this to contact you and verify the business location. | Your business lease, utility bill, or business registration |
| Social Security Number (for sole proprietors) | If you do not have an EIN, banks use your SSN to identify you as the business owner. | Your Social Security card or tax return |
Comparing account opening timelines across institution types
The speed of account opening varies significantly. Online banks are fastest: most open accounts in 5 to 30 minutes, and you can start using the account within hours. Traditional banks are next: in-person opening takes 15 minutes to an hour, and online opening takes 24 to 48 hours. Credit unions fall in the middle: joining takes one to three days, then opening the business account takes another one to two days.
If you need to start accepting payments or paying vendors immediately, an online bank is the fastest route. If you want to speak to someone and do not mind waiting a day or two, a traditional bank or credit union works. Some businesses open an account at an online bank first to get your free guide, then add a traditional bank account later for cash deposits or in-person service.
Fees and minimum balance requirements to compare
Monthly maintenance fees are the biggest cost difference. Online banks typically charge $0 to $5 per month. Credit unions charge $0 to $15 per month. Traditional banks charge $10 to $30 per month. Some institutions waive the monthly fee if you maintain a minimum balance, receive direct deposit, or meet other conditions. Read the fee schedule carefully, because a $20 monthly fee adds up to $240 per year.
Beyond the monthly fee, compare per-check fees (if you write many checks), wire transfer fees (usually $15 to $30), ACH transfer fees (usually free), overdraft fees (typically $25 to $35 per overdraft), and ATM fees outside their network. A bank with a low monthly fee but high wire transfer fees may cost more if you send wires regularly. Calculate your expected monthly costs based on how you actually plan to use the account.
Minimum balance requirements vary. Many online banks have no minimum. Credit unions often have no minimum or ask for $25 to $100. Traditional banks may require $500 to $5,000 to waive the monthly fee. If you cannot maintain the minimum, you will pay the monthly fee, so factor that into your decision.
Frequently Asked Questions
Can I open a business checking account online if I just started my business?
Yes. Most banks do not require you to have been in business for any length of time. You will need an EIN (which you can get from the IRS in minutes online) or a Social Security Number, a business license or formation documents, and a government ID. Online banks are often the fastest option for new businesses because they have no minimum balance and open accounts in minutes.
Do I need a separate business account if I am a sole proprietor?
You are not legally required to, but it is strongly recommended. A separate account keeps your personal and business finances distinct, makes tax time easier, and looks more professional to customers and vendors. Many sole proprietors use their Social Security Number instead of an EIN to open a business account, which is allowed by most banks.
What if I need to deposit cash but prefer an online bank?
Open accounts at both. Use the online bank for regular checking and bill pay, and use a traditional bank or credit union for cash deposits. Some online banks partner with retail locations like Walgreens or CVS for cash deposits, so check whether your online bank offers that option before opening a second account.
Can I switch banks later if I choose the wrong one?
Yes. You can open a new account at a different bank and transfer your balance. The main inconvenience is updating your account number with vendors, customers, and payroll services. Most banks can help you transfer funds, and the process usually takes one to two weeks. There is no penalty for closing an account, though some banks charge a small fee if you close within a few months of opening.
Which type of bank is best for a small business with irregular income?
Credit unions are often the most flexible with small businesses and irregular income because they focus on member service rather than profit. They are also more likely to waive overdraft fees or work with you if you occasionally go negative. Online banks are the cheapest option if you do not overdraft. Traditional banks are middle ground but may charge more if you have occasional overdrafts.