A business bank account is an account from which you’ll conduct almost every financial function of your business, from paying vendors to running payroll. No matter your business’s size, opening this type of account is one of the first tasks to complete as you build.
We’ll cover what you need to know about business bank accounts, how to choose the right one for your business’ needs, and how to open one.

What's in this article?

• What are business bank accounts?
  
• Types of business bank accounts
  
• Do I need a business bank account?
  
• Business bank account vs. merchant account
  
• Which business bank account is best for you?
  
• Best business bank accounts for startups
  
• What do I need to open a business bank account?
  
• How to open a business bank account
  
• Online business bank accounts vs. traditional banks
  
• How Stripe Atlas can help
  

What are business bank accounts?

A business bank Account is a financial account used to manage a Company’s Income, expenses, and cash flow separately from the Owner’s personal finances. Like individuals, businesses can open a variety of bank accounts, including checking and savings accounts. Your primary business bank Account is where you’ll hold Funds for everything related to your business operations, including:

• Paying employees
  
• Paying vendors and suppliers
  
• Buying ads and other marketing expenses
  
• Receiving Funds from investors
  
• Receiving sales Revenue, either directly from customers and clients or payouts from your payments Processor
  
• Paying Taxes
  
• Ordering office supplies
  
• Applying for business loans and grants
  
• Ordering inventory
  
• Paying off the balance from business credit cards
  

Types of business bank accounts

Whether your business operates as a corporation, LLC, or you’re a sole trader, there are three general types of business bank accounts you’ll encounter:

• Business current account: This is the account from which you’ll conduct the essential tasks of business operations. Most of the payment types listed above would be issued from your business current account.

• Business savings account: Maintaining a separate savings account for your business offers the same benefits as a personal savings account. With a high-yield business savings account, you can build an emergency fund, set aside money for future goals, and earn interest on your deposits. Most business current account providers also offer business savings accounts, so it can be advantageous to open one and start accumulating a financial cushion.

• Cash management account (CMA): A CMA is a managed account that combines the functionalities of current, savings, and investment accounts. If you’re looking for a more comprehensive and strategic approach to managing your cash on hand, or you want a higher interest rate on your business savings, a CMA might be a good option.

Beyond the basics, you might want to open additional accounts with your bank, like a business savings, money market, or retirement account. In some cases, your business may also require specialised vehicles to handle specific transactional or regulatory needs.

Here are some examples of other business accounts:

• Merchant accounts: Unlike a standard current account, a merchant account is a specialised holding area used exclusively for processing credit and debit card payments before they are settled into your primary business bank.

• Trust or escrow accounts: Essential for industries like law or real estate, these accounts legally segregate third-party funds from your firm’s operating capital to ensure regulatory compliance.

• Money market and brokerage accounts: For businesses with significant surplus cash, money market accounts (MMAs) offer higher yields with liquid access, while business brokerage accounts allow you to invest idle reserves into stocks and bonds to turn cash into a growth asset.

Do I need a business bank account?

If your business is an official entity or you’ve begun accepting payments for your goods or services, you likely need a business bank account. Once you’ve filed the appropriate legal documents to make your business official, you should open a business bank account as soon as possible.

A business bank account is important because it offers a range of key financial benefits, including separating personal and business finances, simplifying accounting and taxes, and helping establish your business’s financial credibility.

While personal accounts can be used for sole proprietorships or single-owner LLCs, they can make tax reporting more difficult and complicate accounting. In some cases, they can also open up your personal finances to additional liability.

No matter how big or small your business, creating a clear distinction between business and personal funds is important for tax purposes and staying organised.

Business bank account vs merchant account

The difference between business bank accounts and merchant accounts relates to how they work and who operates them.

• Functionality: A merchant account is a bank account used specifically for holding funds from customer transactions before the money is deposited into the business’s bank account. Businesses don’t use this account for any other purpose. By contrast, regular business bank accounts hold funds for a wide range of essential financial tasks.

• Where they’re located and how they’re operated: Most, if not all, banks and credit unions offer business bank accounts. Merchant accounts can also work this way if you decide to open one yourself, although increasingly, many businesses are choosing a different approach to accessing the functionality they need to accept payments. Payments processors like Stripe give their users access to an umbrella merchant account as part of a broader scope of payment processing support. In other words, while you do need to choose a financial institution with which to open a business bank account, if you use a payments processor like Stripe, you don’t need to open a separate merchant account.

Which business bank account is best for you?

Business owners have more business bank account options than ever before, including at traditional major banks and new online banking startups that cater to small businesses.

To decide which business bank account is right for you, weigh these key factors:

• Scope of services and account features: Most business owners will want a bank that offers the following services:
  
  • Online and mobile banking
    
  • Bill pay
    
  • Electronic transfer
    
  • Debit cards
    
  • Paper cheques
    

You don’t have to get everything on your business banking wishlist from one institution, but keeping your accounts within the same banking ecosystem will simplify your finances.

• Interest rates: Research and compare interest rates on any account you're considering. A competitive interest rate will help your money grow.

• Service fees: Remember to include bank fees when weighing the pros and cons of each bank’s offering. Here are a few types of fees you might encounter while shopping for a business bank account:

  • Minimum balance fees
    
  • Electronic transfer fees (domestic and international)
    
  • Monthly maintenance fees
    
  • ATM fees (out-of-network withdrawals)
    
  • Overdraft and insufficient funds (NSF) fees
    
  • Account closure fees
    

Some banks offer a no-fee business current account for startups, though businesses still typically encounter fees when sending electronic transfers or accepting foreign currencies.

• Branch locations: For some businesses, proximity to a physical bank branch is vital. It’s also wise to check the size of a bank’s ATM network and inquire about possible out-of-network ATM fees. Note that an online business bank account may not offer these features, so be sure to assess what matters for you and your business and find a bank that fits those needs.

• Transaction limits: Some banks impose limits on the number of transactions account holders can make during a given period (daily, weekly, or monthly). This might include caps on the number of deposits, withdrawals, bill payments, or transfers between accounts. You might also run into limits on transfer amounts. If your business often processes a high number of transactions, choose a bank that offers unlimited transactions on business bank accounts.

• Integration with existing parts of your business: Choose a bank account that can integrate easily with your existing payment processing, payroll, and bookkeeping systems.

Best business bank accounts for Startups

Startups have unique qualities compared to other businesses. When evaluating providers, prioritise actionable features that make it easy to access venture capital Funds and bridge working capital between funding rounds:

Look for banks that Support access to capital

Startups need more than just a place to store cash; they need a partner that understands the venture ecosystem. Prioritise banks that offer venture debt, bridge loans, or specialised lines of credit designed for high-growth companies.

• Concrete feature
  Direct connections to venture capital networks and access to venture debt products.

• Questions to ask

  • "Does the bank offer bridge loans between funding rounds?"
    
  • "Are there relationship managers who specialise in my specific industry?"
    

• The trade-off
  Specialised startup banks often require higher minimum balances or specific funding milestones to unlock their best rates.

Choose accounts with strong cash management tools

Managing burn rate is the most critical task for an early-stage Founder. Look for banks that provide real-time visibility into your financial health rather than just a list of transactions.

• Concrete feature
  Real-time runway dashboards and automated, investor-ready reporting.

• Questions to ask

  • "Does the platform Integrate directly with our accounting software?"
    
  • "Can I generate a board-ready burn rate report in one click?"
    

• The trade-off
  Sophisticated analytics tools sometimes come with higher monthly service fees compared to more basic business checking.

Prioritise Support for international and multicurrency transactions

If you hire employees abroad or sell to international customers, you need an Account that functions across borders without excessive friction.

• Concrete feature
  Multicurrency accounts that allow you to hold and Settle in local Currencies to avoid foreign exchange (FX) fees.

• Questions to ask

  • "What are the fees and Exchange rate markups for international wire transfers?"
    
  • "Can I issue virtual cards for my global contractors in their own currency?"
    

• The trade-off
  Banks with expansive global footprints may have slower local customer service or more complex Compliance requirements for international transfers.

Look for access to startup-specific financial advice

Conventional banks often treat Startups like small Retail businesses. You need a provider that understands that a prerevenue Company with US$2 million in the bank is a healthy entity, not a high-risk outlier.

• Concrete feature
  Access to advisers who can guide you through R&D Tax credits, treasury management for idle capital, and scaling your financial Stack.

• Questions to ask

  • "What stage of Startup do you usually work with: preseed, Series A, or beyond?"
    
  • "Do you offer webinars or resources on scaling financial operations?"
    

• The trade-off
  High-level strategic advice is often reserved for businesses that maintain a significant “target balance” or use the bank’s treasury management services.

What do I need to open a business bank account?

Banks have varying requirements to open a business bank account, but generally you'll need the following:

• Legal business name under which you registered your business
  
• Employer identification number (EIN)
  
• Business mailing address
  
• Personal address and contact information
  
• Driver's licence or other forms of identification
  
• Legal documents such as articles of incorporation or articles of organisation
  
• Any relevant business licences or permits
  
• Business’s partnership agreement (if applicable)
  

Not every banking institution will require all of these documents—and some will require more—but preparing makes applying easier.

How to open a business bank account

Let’s do a quick recap of what steps are involved in opening a business bank account:

1. Identify which type of business bank account you need

Do you need a business checking account? Checking and savings? Checking, savings, and investment? Determining these needs will help you decide which types of accounts you’re interested in opening.

2. Compare business bank account options

As you’re reading through the business bank account offerings on the market, list the features you must have, those that would be nice to have, and those you probably won’t use. Track of the different fees at each bank.

3. Narrow down your list to a few options that meet your requirements

Trim your options to three to five banks that meet all of your needs. This assessment could be based on the features they offer through their accounts, their market positioning specifically catering to businesses in your industry or stage, or recommendations from other businesses whose needs mirror your own.

4. Contact your top bank choices to ask questions

Contact the financial institutions on your short list to speak with a representative. You’ll have a chance to ask a real person your questions, and you might even receive unadvertised offers or incentives to open an account.

5. Choose a bank to open an account with

By now, you’ve done your homework, you’re familiar with the options, and it’s time to choose.

6. Gather your required documentation

You already have a solid idea of what documents you’ll need to open the account, but once you’ve decided which bank to use, you can ask the bank directly for a list of required materials.

7. Submit your application and open your business bank account

Once you have everything you need in one place, the process of opening the account is usually straightforward and brief. You’ll submit the required documents and be given onboarding instructions from the financial institution.

In most cases, the process of opening a business bank account isn’t overly complicated. The real challenge is tackling the volume of financial institutions who are competing for your business. But by assessing all the possible options and weighing them against your list of needs and priorities, you’ll be in the best position to make a strong choice.

Online business bank accounts vs. traditional banks

How Stripe Atlas can help

Stripe Atlas handles everything you need to legally launch your company—incorporation, employer identification number (EIN), equity setup, and tax filings—so you can fundraise, open a bank account, and start accepting payments in as little as two business days, from anywhere in the world.

Join 100,000+ startups incorporated using Atlas, including startups backed by top investors like Y Combinator, a16z, and General Catalyst.

Get started in minutes with Atlas

The application takes under 10 minutes. You'll choose your company structure, confirm your name is available, add up to four cofounders, set your equity split, and e-sign. Then Atlas takes it from there, including notifying cofounders to sign their documents electronically.

Banking and payments before your EIN arrives

Atlas files your EIN application automatically after incorporation. You don't have to wait—Atlas enables pre-EIN payments and banking so you can start accepting payments and making transactions right away. US founders with a Social Security number are typically eligible for expedited IRS processing.

Automatic 83(b) tax election filing

Atlas files your 83(b) election for you—US and non-US founders alike—with US Postal Service certified mail and tracking to reduce personal income taxes. You'll get a signed 83(b) election and proof of filing directly in your Stripe Dashboard, with certified mail confirmation.

World-class company legal documents

Atlas provides all the legal documents you need to start running your company, drafted by Cooley, one of the world’s leading venture capital law firms, and stores them directly in your Stripe Dashboard. These documents are designed to help you fundraise immediately and ensure your company is legally protected, covering aspects like ownership structure, equity distribution, and tax compliance.

$2,500 in Stripe credits, plus $50K+ in partner discounts

Atlas startups get US$2,500 in Stripe product credits for their first year, plus US$50,000+ in discounts on essential tools—Mercury, AWS, Carta, Xero, Perplexity, and more. Delaware registered agent service is also included free for your first year.

Learn more about how Atlas can help you set up your new business quickly and easily and get started today.