Banks, credit unions, and online platforms all offer business accounts, but they differ in what they require upfront, what they cost monthly, and how much help you get in person
You have three main routes: a traditional bank branch, a credit union, or an online-only bank. A traditional bank (Chase, Bank of America, Wells Fargo, regional banks) requires you to visit a branch with your documents, takes a few days to open the account, and charges monthly fees that range from $0 to $25 depending on the account type and balance. A credit union requires membership but often has lower fees and may be more flexible with newer businesses; you explore in person or online and typically get approved within a day or two. An online bank (Mercury, Brex, Wise, Square) opens entirely online in minutes to hours, has no monthly fees in most cases, but offers no physical branch and limited phone support.
The choice depends on whether you need in-person service, how much you're willing to pay monthly, and what your business structure is. A sole proprietorship can open an account at almost any institution. An LLC, corporation, or partnership needs to show formation documents (articles of incorporation or organization) and an EIN letter from the IRS, which takes longer to gather.
Key Takeaways
- Traditional banks require a visit with your business documents and ID, take several days to open, and charge monthly fees; credit unions are often cheaper but require membership.
- Online banks open in minutes with no monthly fees but have no physical branch and limited phone support, so they work best if you handle most banking online.
- You will need an EIN (Employer Identification Number) from the IRS for any business structure except a sole proprietorship using your Social Security number.
- Minimum opening deposits vary from $0 to $500 depending on the bank and account type, so compare before you choose.
- Some banks offer business credit cards, payment processing, or accounting software bundled with the account, which can save money if you use those services.
What documents you need before you walk in or explore online
Every bank asks for the same core set. You need a government-issued ID (driver's license or passport), your Social Security number or EIN, and proof of your business address (a utility bill, lease, or mortgage statement dated within the last 60 days). If your business is registered as an LLC, corporation, or partnership, bring your articles of incorporation or organization and your EIN letter from the IRS. If you are a sole proprietor, you can use your Social Security number instead of an EIN, though many banks will ask you to get an EIN anyway.
Some banks also ask for a business license or DBA (Doing Business As) certificate, though this is less common. A few online banks skip the business formation documents entirely if you are a sole proprietor, which speeds up the process. If you do not have an EIN yet, you can request one free from the IRS website (irs.gov) or by phone; it arrives when ready online or by mail within two weeks.
Traditional banks: what to expect at the branch
Walk in with your documents during business hours and ask to open a business account. A banker will review your paperwork, ask about your business (what you do, how long you have been operating, expected monthly deposits), and run a background check. This takes 20 to 45 minutes. You will sign paperwork, choose a debit card design, and set up online banking access. The account opens that day, though it may take one to three business days for the debit card to arrive and for transfers to other banks to clear.
Monthly fees range from $0 to $25 depending on the account tier and your balance. Some banks waive fees if you maintain a minimum balance (often $1,000 to $5,000) or set up direct deposit. Most offer a business debit card, check writing, and online bill pay at no extra cost. If you need a business credit card, merchant services, or accounting software integration, ask what the bank bundles with the account—some offer discounts if you open multiple products at once.
The advantage is in-person support: you can walk in with questions, deposit cash, and speak to someone who knows your account. The disadvantage is the monthly fee and the time required to visit a branch.
Credit unions: lower fees, but membership first
Credit unions are member-owned, not shareholder-owned, so they often charge lower fees and offer better rates. To open a business account, you first become a member, which usually means buying a share (typically $5 to $25) and meeting membership criteria—some credit unions serve a specific employer, industry, or geographic area, while others are open to anyone. Once you are a member, opening a business account takes one to two days and follows the same document process as a bank.
Monthly fees are often $0 to $10, and many credit unions do not charge overdraft fees or charge less than banks do. The catch is that credit unions have fewer branches and ATMs than large banks, so if you need to deposit cash or withdraw money frequently, check the network first. Some credit unions are part of shared branching networks (like CO-OP or Alliant) that let you use other credit unions' branches, which expands your access.
Credit unions are a good fit if you want lower fees, do not mind the membership requirement, and have a credit union near you or do most banking online. They are less useful if you need a large national branch network or specialized business services like merchant processing.
Online banks: fastest to open, lowest cost, no physical branch
Online banks like Mercury, Brex, Wise, and Square open entirely on your phone or computer. You upload photos of your ID and business documents, answer questions about your business, and the account opens in minutes to a few hours. There is no minimum deposit at most online banks, and monthly fees are $0 for the basic account. You get a debit card (usually within 5 to 10 business days), online banking, bill pay, and sometimes invoicing or accounting software integration.
The trade-off is that you cannot walk into a branch, deposit cash, or speak to someone by phone at most online banks. Some offer email support or a chat feature, but response times vary. If your business is entirely digital (freelancing, online sales, remote work), an online bank works well. If you need to deposit cash regularly or want to speak to a person, you will be frustrated.
A few online banks target specific business types: Brex focuses on startups and high-growth companies, Wise specializes in international transfers, and Square bundles payment processing with banking. Read the fine print on what is included and what costs extra before you open.
Comparing monthly fees, minimum balances, and add-on costs
| Type | Monthly Fee | Minimum Balance | Debit Card | Check Writing |
|---|---|---|---|---|
| Traditional Bank | $0–$25 | $0–$5,000 | Included | Included |
| Credit Union | $0–$10 | $0–$500 | Included | Included |
| Online Bank | $0 | $0 | Included | Included |
Beyond the monthly fee, watch for hidden costs. Some banks charge per check written, per wire transfer, or per ACH transfer (moving money to another bank). Online banks usually include unlimited transfers. If you need a business credit card, some banks offer one free with the account; others charge $95 to $150 per year. Merchant processing (accepting card payments) costs 2% to 3% per transaction at most banks, though some online banks bundle it at a lower rate.
Calculate your actual monthly cost by adding the base fee, any balance requirements you cannot meet, and the services you will actually use. A business that writes 20 checks a month at a bank that charges $0.15 per check pays $3 extra; a business that makes 10 wire transfers at $15 each pays $150 extra. An online bank with $0 fees and unlimited transfers may be cheaper even if you pay for merchant processing separately.
How to decide between them
Start by answering three questions: Do you need to deposit cash regularly? Do you want to speak to someone by phone or in person? How much are you willing to pay monthly?
If you deposit cash regularly and want in-person support, choose a traditional bank or credit union. If you want the lowest cost and do not need a physical branch, choose an online bank. If you want a middle ground—lower fees than a big bank but some in-person access—choose a credit union.
Next, check what services you need beyond basic checking. If you accept card payments, compare merchant processing fees. If you send invoices, see whether the bank offers invoicing software. If you work internationally, check whether the bank handles foreign transfers and at what cost. Some banks bundle these services; others charge separately.
Finally, open the account at the institution that meets your needs and costs the least. You can always switch later if your business grows or your needs change, though switching takes time (setting up direct deposits, updating vendors with your new account number, closing the old account).
Frequently Asked Questions
Can I open a business account as a sole proprietor without an EIN?
Yes. Most banks let you use your Social Security number instead of an EIN if you are a sole proprietor. However, some banks require an EIN anyway, so call ahead or check the bank's website. Getting an EIN is free and takes minutes online at irs.gov.
How long does it take to open an account?
Online banks open in minutes to a few hours. Traditional banks and credit unions take one to three business days. The debit card arrives by mail in 5 to 10 business days at most institutions. If you need to move money between banks, allow an extra one to three business days for transfers to clear.
What if I do not have a business address yet?
Most banks accept a home address as your business address if you are a sole proprietor or work from home. Some require a commercial address for LLCs or corporations. A few banks accept a virtual office address or mailbox service. Call the bank and ask before you explore.
Can I open a business account online if I have a new LLC?
Most online banks require your articles of organization and EIN letter, which takes time to gather. Some online banks skip these documents for sole proprietors but not for LLCs. Traditional banks and credit unions are more flexible and may open the account in person even if your documents are not perfect. Check with the specific bank first.
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 makes taxes easier (your accountant can see business income and expenses clearly), protects your personal assets in a lawsuit, and looks more professional to customers and vendors. The cost is low enough that the benefit outweighs it.