How to Open an LLC Bank Account: 2025 Guide

One of the most important moves after you've formed a limited liability company (LLC) is to open a separate business bank account for your LLC.

Having a separate bank account is strongly recommended because a limited liability company is a separate entity from you as an individual.

You have provided yourself with liability protection by creating an LLC, and in order to enjoy the limited liability protection, you must keep your personal accounts completely separate from your business banking by opening a new account for your LLC. If you mix your personal and business finances in your personal bank account, you are in danger of losing those limited liability protections and could be liable for your business's financial obligations.

Learn what you need to know about how to open a business bank account for your LLC and help prevent your business bank accounts from overlapping with your personal accounts.

Why you need a business bank account for an LLC

When you open a bank account for an LLC, you are protecting your personal funds while making it easier to run your business.

So, why do you need a business bank account for your LLC?

To start, opening a separate bank account for your business protects your personal assets from business debts and legal liabilities. In other words, it provides legal liability protection. For instance, if your business owed a creditor money, the creditor could only legally pursue your business funds (not your personal funds) to cover the debt.

Having two different bank accounts also helps simplify bookkeeping. When your accounts are separate, it's easier to track cash flow and distinguish profits and losses associated with the business. This is especially helpful when determining which expenses are tax-deductible come tax season.

Moreover, opening a business bank account lets you establish business credit, which can help you score better insurance and loan terms. If you want to grow and expand your business, a business line of credit will come in handy.

Having a separate business checking or savings account for your business funds means:

• You will signal to clients that your business is legitimate and that you have taken the time to set up a separate entity. Your business is not merely a hobby, and you want your customers to know that you are running a business you plan on operating for the long haul rather than while you're in between other pursuits.
• Either you or your accountant won't waste billable hours sifting through all of your expenditures to separate business expenses and personal finances when it is time to file taxes.
• Should a time come when you would like to utilize credit with your bank for your business, you have an established account with a positive history, making you an ideal borrower for your bank.

How to open a business account for your LLC

Opening business accounts is a necessary step for most LLC businesses, and it is a fairly simple process. Regardless of which institution you choose, ensure a smooth application process by checking their documentation requirements and understanding their business banking features prior to applying.

Follow these simple steps to open a business bank account for an LLC.

Step 1: Gather the necessary paperwork and information

Begin by asking yourself, what do I need to open a business bank account?

The first step in opening an LLC bank account is gathering all necessary documentation and information needed by the bank. While there may be some variation among banks, generally speaking, you will need the following documents in order to open a business bank account.

• Personal identification and information: When opening a business bank account for your LLC, you will need to provide personal identification and details such as your driver's license or passport, your home mailing address, date of birth, personal phone number, your email address, and also your Social Security number. If you are a non-U.S. resident, you can provide your individual Taxpayer Identification Number (ITIN), which is a tax processing number available to certain non-U.S. residents.
• Employer identification number (EIN): While single-member LLCs may use the owner's Social Security number (SSN), any company with employees will need to have an EIN. If you are the only employee of the company and are operating it as a single-member LLC, you may still obtain an EIN in order to protect your identity. You may need an EIN verification letter to provide to your bank.
• Business details: The business bankers will need your company name, the address of your registered agent, phone number, the date your business was formed, and also what type of business and industry it is.
• Business license: You will need to provide proof that you are licensed to conduct business if your industry requires it.
• Business formation documents: For an LLC, this will include your articles of organization, and any other documents related to your business' formation. Make sure to check with your institution in order to provide the proper documentation.
• LLC operating agreement: If you are not operating as a single-member LLC, you may need to provide documentation that you are authorized to open an LLC bank account on your business's behalf by sharing your operating agreement. Additionally, if there are other LLC owners of the business, they may be required to apply for the account with you.

Step 2: Research your options for opening an LLC bank account

Your business has wants and needs that are unique to you, and your choice in banking should reflect the current state of your business as well as your plan for growth. As you begin your search for the right bank, here are some banking features for all LLC members to consider.

• Checking accounts vs. savings accounts: Decide whether you want to open a basic business checking account or savings account. There is no right or wrong answer; it just depends on what account best aligns with your business goals. For instance, some small business owners choose savings accounts to earn interest, while others prefer business checking accounts for everyday transactions.
• Service fees: When choosing which financial institutions best fit your LLC, consider any service fees associated with doing business, such as payment receipts, ATM fees, deposit fees, and wire transfer fees. Depending on the types of transactions your business will be making, these transaction fees can add up and become a burdensome expense for your business.
• Monthly transaction limits: Depending on your monthly transaction volume, these limits may end up costing you additional monthly fees. In this case, you may want to look for a bank that offers unlimited transactions and free cash deposits and withdrawals.
• Interest rates: Many business checking accounts do offer interest, but interest rates can vary greatly. Interest rates should be a factor in which bank you choose. Some interest rates may be dependent on the type of business account as well as the minimum balance, so be sure to read all of the qualifications for the best interest rates possible.
• Banking services: Research other offerings for your business, including lines of credit, small business loans, and any additional business services provided alongside a business bank account.
• Technological integration: You'll have preferences as to which technology you utilize for your business, whether that be Quickbooks, Venmo, PayPal, Zelle, or any other payment services and accounting software. Make sure you choose a bank that will allow you to continue using these tools.
• Digital features: Many business account features should be accessible online through a banking website or app. For instance, online bill pay is a convenient feature.
• ATM and local branch access: Depending on your specific business, you may have in-person needs such as frequent cash deposits or the ability to withdraw funds that require a traditional bank with physical branches. In that case, a brick-and-mortar option will be a priority for your banking needs.
• Minimum balance requirements: Most business accounts do not have hefty opening balance requirements, but you should always know if there is a minimum balance required to maintain your business account. On average, minimum business account balances range from $5 to $1,000.

Step 3: Apply for your business bank account

Once you've gathered all the appropriate information and met the business banking requirements, you're ready to apply for your business checking account or savings account. You can do so in person or online.

If you decide to apply in person, visit your local branch and bring all the required documents and information. If you have a multiple-member LLC, you may need all members present, so check with the bank ahead of time. Depending on the bank, they might also require you to schedule an appointment to open a business account.

Once you've arrived, you'll show the bank representative your information, describe your business, select a bank account type, and fill out the paperwork. Once the representative has verified your information and you've submitted the initial deposit, you'll receive your bank account details and access information.

Many online banks are available for businesses, too, so you can open an LLC business bank account without leaving your house. There are some limitations to opening an online-only bank account for your business, such as having a multiple-member LLC, but each bank's website will make these requirements clear as you explore the possibility of an online account.

In order to open an LLC business account online, you will need all of this same information. You will be asked to upload these documents through the bank's secure server. Finally, you will need the funds to deposit the minimum balance required for opening your LLC business bank account.

Step 4: Transfer in a deposit

You may need to transfer a mandatory minimum opening deposit to activate the account as part of the application process. This ensures your bank account is ready for transactions and compliant with banking policies. Most financial institutions will let you deposit cash, use a business check, or wire money into the account.

When opening your business checking account, inquire if they have minimum balance requirements. In some cases, your initial deposit might fulfill the minimum balance requirement, but you may need to maintain a certain amount in your bank account at all times to avoid incurring fees.

What business owners should know about opening an LLC bank account

When opening your LLC bank account, whether in person or online, you will want to make sure that all of your business's needs are addressed. Most banks use enticing perks in their advertising, but the fine print may not hold up to your scrutiny. For example, perhaps you've discovered an online banking institution with an incredible annual percentage yield (APY), but the minimum balance is $100,000 in order to receive that APY.

Many banks also offer 1% cash back for each business debit card purchase, although some banks may restrict this benefit to a limited number of merchants. If you don't frequent those merchant services for your company or even plan on using a debit card frequently, this is not a benefit that should influence your choice of bank.

When choosing a banking institution for your LLC, you should also explore options for both checking and savings bank accounts. Make sure you familiarize yourself with your options in banking and choose the institution that best serves your business. Remember, however, that if you are ultimately dissatisfied with the bank you choose and it is no longer a good fit for your business, you can always revisit your decision and move your banking elsewhere.

In addition to ensuring your business needs are met, be sure you understand and comply with the bank's requirements. For example, most banks will require that the primary applicant is a U.S. citizen and an owner of the LLC with a minimum of 25% ownership in the business. You may also have to agree to the bank running a credit report to verify your information, and if you're using online banking services, you must agree to electronic communication.

Before signing on the dotted line, read the fine print and make sure you understand the terms and conditions.

Sharing and selling personal information

When you open a business bank account, you provide the bank with a lot of personal information, which may be shared with third parties. While a bank may not share private information such as your Social Security number or your income, other information can be shared for marketing purposes.

Banks collect your personal information to determine your eligibility for their services and help the bank prevent fraud, provide better service, and also to adjust its advertising.

While some exceptions and opt-out possibilities exist, there are no blanket opt-out options for individuals and businesses. Additionally, any time you access your banking website or app, your bank can gather information about your web browsing history, your social media, and even the type of device you are using and where you are using it.

How LegalZoom can help

Once you have chosen a bank for your business banking needs, you will need a service to manage all of your accounting needs. LegalZoom offers LZ Books—accounting software to manage your small business finances through tracking your income and business expenses, invoices, and payments, all in one centralized location. LZ Books securely connects with your business bank accounts, creates invoices, and sorts your finances into tax categories. Moreover, if you are also an LZ Tax customer, LZ Books shares your financial information seamlessly across these services.

FAQs

What do I need to open a business bank account?

When opening a business checking account or savings account, you'll need to provide personal identification details and information about your business. Be prepared to provide your Social Security number, employer identification number, home address, business address, and registered agent information. The bank may also ask for your business formation documents, such as your articles of organization, operating agreement, and business license.

Should a single-member LLC open a business bank account?

Yes, a single-member LLC should open a separate business checking account or savings account to prevent mixing their business funds with their personal funds. This helps protect their personal assets from legal action.

How long does it take to open a business bank account for an LLC?

It depends on several factors, such as whether you applied in person or online. Some online banks will approve your business checking application within just a few minutes, while other financial institutions may take several weeks to process your application.

What should I do if my LLC's bank account application is denied?

There are several reasons why a bank might deny your application. For example, you may have made a mistake on your application or provided outdated information. In other cases, the bank may have uncovered that you have poor credit history, a series of overdrafts or unpaid fees, or insufficient cash flow.

If the bank denies your application, you can try speaking with a representative to determine why they didn't accept your application, ask the bank for reconsideration, reapply with the correct information, or submit a new application with a different bank.

What happens if I close my LLC's bank account?

If you close your LLC's bank account, you'll need to ensure you've withdrawn all the funds and set up updated payment information for any direct or automatic payments.

Remember, it's crucial to keep your business and personal bank accounts separate, so if you close your LLC bank account, be sure to have a plan in place for opening a new one.

What are the best business bank accounts for LLCs?

The best business bank account is one that does not charge monthly maintenance fees, transaction fees, or overdraft fees. The best business checking accounts also offer free cash deposits, unlimited transactions, convenient mobile check deposits, integration with your accounting software, interest earnings, and even cash back or reward options. When researching business accounts, read the fine print and familiarize yourself with the terms and conditions.

Jenn Morson contributed to this article.

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