Opening a bank account for your business is an important step in your journey as a business owner. Not only is this account essential to your business operations, but it can also protect your personal funds, help you avoid tax problems, and simplify your bookkeeping. And that’s just the beginning of the benefits of a business account. After choosing the right bank, the next step is to familiarize yourself with the types of accounts offered and the account opening process.
The thought of going into a bank to open a business account can be intimidating—especially if your business is new and you don’t have a lot of cash. Whether you choose to open your business account in person or online, it’s important to familiarize yourself with the process first so you can feel confident and prepared. So you can get the most out of your business account from day one.
Understand general requirements and fees
Before you begin opening a business account, it helps to understand the general requirements and fees associated with these types of accounts. For example, many bank accounts require a minimum balance to avoid a fee. Some have monthly service fees. And make sure you understand ATM fees. Does your bank reimburse ATM fees charged by external banks? If not, you need to be aware of how robust the ATM network is, both in your area and, if you’re traveling for work, across the country.
Many banks offer account holders ways to avoid some of these fees, including having a debit or credit card tied to the account or using other bank services.
Know the types of accounts
As with private banking, there are several different commercial bank accounts. Each has its own benefits, so you may need more than one to help your business thrive. Types of accounts include:
- Business checking account — A transactional account for day-to-day operations that allows you to make purchases by check or debit card
- business savings account — An account designed to help you deposit income or reserve funds, often with the ability to earn interest
- merchant account — A business account that allows you to accept and process payments from credit and debit cards
- business credit card — Convenient and deposit-free financing similar to a short-term loan. Many business credit cards allow you to earn rewards, manage cash flow, and build business credit
Gather the relevant documents
In order to open an account for your company, you must first provide the bank with a number of important documents. Having these ready will help the application process go smoothly and you will appear more professional if you decide to meet a banker in person.
Documents to collect before opening an account include:
- Company formation documents — These show how your business is structured, how it works and who is responsible for managing the finances. For corporations, these are your articles of incorporation and for LLCs, your articles of incorporation.
- property contract — If your company is a partnership or corporation, your ownership agreement sets out the rights and obligations of each owner.
- Business License — Before you can open an account, your bank will want to see if your company has submitted the documentation needed to operate legally.
- Doing Business as Certificate – This document shows the legal name of your company.
- employee identification number — This nine-digit number is issued by the IRS and is meant to identify your business.
- Personal identification documents — As a business owner, you must provide the bank with a government-issued form of ID, e.g. B. a driver’s license or a passport.
Make a deposit and use your account
One of the final steps in opening a bank account for your business is making the initial deposit. Before beginning the process, make sure you are familiar with the bank’s requirements for this first deposit so that you are prepared to deposit these funds right away. Once your new bank account is set up, you can take advantage of its features by collecting payments from customers or writing checks to vendors. You can also sync your accounting software to make tracking your business transactions a breeze.
Get started today
Speak to a Chase commercial banker to learn more about the benefits and process of opening a commercial bank account, or visit our Business Review page to compare accounts and find one that suits your needs.
For Information/Educational Purposes Only: The views expressed in this article may differ from those of other JPMorgan Chase & Co. employees and departments. The views and strategies described may not be appropriate for everyone and are not intended as specific advice/recommendations for any individual. The information has been obtained from sources believed to be reliable, but JPMorgan Chase & Co. or its affiliates and/or subsidiaries do not guarantee its completeness or accuracy. You should carefully consider your needs and goals before making any decisions and consult the appropriate professionals. Outlook and past performance are not guarantees of future results.
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