Most businesses require a checking account to operate. Business checking accounts make it simple and easy to pay suppliers, and to receive funds from customers. In fact, in today’s age of cashless transactions it has become more or less compulsory for a business to open a bank account. In this article, we’ll explain to you how to open a business checking account online, and list all the documents you need to open one.

First, research your options

Like all financial services, business banking products differ from bank to bank. Every checking account has unique features and one account may suit you better than another account. It is worth making a list of your needs and requirements before you start researching which banks offer the best options.

Also keep in mind that some banks are online only, which may not be ideal if you frequently need to discuss matters with a bank manager. Also, if you frequently deposit cash into your account you should make sure your bank has a branch local to you.

Note the fees on your account

Fees is an unavoidable part of banking, and most business checking accounts charge fees. Unfortunately, fees quickly become complicated and it is worth having a good think about how you use your account. Some accounts charge monthly fees (which may be waived if you hold a sufficient balance) and many accounts charge fees for transactions.

For example, if you frequently send and receive wire transfers, think carefully as you open a business checking account online: does the bank charge large fees for every wire transfer? If so, frequent incoming wire transfers can become costly.

Choosing your bank

Once you’ve researched the banks in your area, and online banks if an online bank would be appropriate for you, compare the account features and benefits against your list of requirements. We’ll have a quick look at some of the most popular banks in the US as an introduction to the different checking accounts.

Ally business checking

One of the most popular online banks in the US, Ally offers a range of online banking services including a checking account. However, Ally does not yet offer a business banking or business checking account.

If you run a small business you can still use Ally for your banking needs, but you will be using an Ally Interest Checking account which is a personal banking product. For some people using a personal banking account for business purposes is perfectly fine. The Ally checking account does have the benefit of a solid interest rate and no monthly fees.

Chase small business checking

Chase is another very popular bank with a broad branch base all over the US plus extensive online banking services. Unlike Ally, Chase offers a dedicated business checking service. You can choose from a couple of options including Chase Total, Chase Performance and Chase platinum.

Each service level comes with different benefits, and different fees. The higher your monthly service fee the more features you get with your account. However, each account has a fee waiver threshold: if you keep a sufficient balance in your account, your fees are waived.

Visit Chase’s page to open a Business Checking Account right now.

Bank of America checking

You could also look at the Bank of America Business Fundamentals checking account, which provides a level of perks and services that is very competitive with the Chase business checking accounts. With this account you get more options to waive the monthly fee. Simply spending on your business debit card can lead to a monthly fee waiver.

The bank also offers a Business Advantage checking account which offers more benefits, including Quickbooks integration, but at a higher monthly fee. Note that it also waives fees on some banking services, if you regularly use these services you could save despite the higher monthly fee.

Open a checking account in your local branch

For many businesses a branch relationship with their bank is still very important.  That may be the case for you too, if so you should open your checking account at your local branch. Depending on the type of business you run you will require just a tax ID number and your social security number. If your business is incorporated, the list of requirements is longer, and will usually include:

  • Articles of incorporation of the business
  • The Federal Employer Identification Number (tax ID number)
  • The business name filing document
  • A business license that contains both the owner name and the business name
  • Proof of address for the owner or a director
  • Government approved ID such as driver’s license or passport

In-branch application should take less than an hour, and it is also a good opportunity to discuss your broader financial requirements with a bank. You could also consider opening a savings account for tax payments while some banks could also help you to set up a merchant account, which we will discuss later.

Open a free business checking account online with no deposit

Plenty of businesses have no need to ever set foot in a bank, and to open a business checking account online can save a busy business a lot of time. It’s not just online banks that offer online account applications. Many major US banks offer businesses the opportunity to open a business checking account online without the need to make an initial deposit.

You won’t get the chance to speak to a member of staff, but in many cases, you can complete an online application form in as little as ten minutes. Once done, most banks will require you to submit the documentation described in the previous section. It’s simple and easy to fax, or scan and email your ID and registration documents to complete your online application.

Getting ready to take payments

Remember, getting your business checking account may be just the first step. If your business ordinarily deals with large contracts involving infrequent payments your checking account will probably be sufficient for accepting payments. You just do so via wire transfer. However, many businesses sell goods and services that involve smaller payments, or even recurring payments.

These types of payments are often made by credit card and your business will need to find a way to charge cards. To do this, you need to set up a merchant account for your business. A credit card merchant account allows you to accept both small and large payments via credit and debit cards. Merchant accounts also let customers pay online, so a customer can buy and pay in one step. If you’re only receiving card payments online, consider PayPal as an alternative.

Manage your finances

Congratulations, you now have a business checking account and you can accept payments. Always keep in mind that managing business finances can be more complicated than managing personal finances. If you manage your business finances you should take the time to learn how to do cash flow projections, how to set funds aside for taxes and how to deal with finances around employees. Alternatively, consider hiring an accountant to help you successfully manage your business finances.