Banks, credit unions, and online platforms all offer business checking
You can open a business checking account at a traditional bank, a credit union, or an online-only financial institution. Each route has different requirements, different fees, and different speed. The choice depends on whether you need a physical location to visit, how much you plan to keep in the account, and what features matter most to your operation.
Most business owners start by looking at their existing bank first—many will let you open a business account in the same branch where you bank personally. But the account that is easiest to open is not always the one that costs least or works best for your business type.
Key Takeaways
- Traditional banks require in-person visits to some branches, charge monthly fees ranging widely, and often require a minimum balance or average balance to avoid fees.
- Credit unions typically charge lower fees than banks and may offer better rates on business loans, but membership requirements and limited branch networks can slow things down.
- Online banks have no monthly fees and no minimum balance requirements, but you cannot deposit cash and cannot speak to someone in person if something goes wrong.
- You will need an Employer Identification Number (EIN) from the IRS, a business license or registration from your state, and a personal ID to open any account.
- Opening takes one to three business days at online banks, one to five days at traditional banks, and varies widely at credit unions depending on membership status.
Traditional banks: branches, fees, and minimum balances
A traditional bank—Chase, Bank of America, Wells Fargo, or a regional bank in your area—will let you walk into a branch and open a business checking account in person. You bring your documents, sign the paperwork, and the account is usually active the same day or the next business day. If something goes wrong with a deposit or a wire, you can walk back into the branch and talk to someone.
The cost is the trade-off. Most traditional banks charge a monthly maintenance fee for business checking, typically between $10 and $25 per month, though some waive it if you keep a minimum balance—often $1,000 to $5,000—or if you maintain a certain average balance over the month. Some banks also charge per-check fees, per-deposit fees, or fees for wire transfers. A few regional banks have lower-fee business accounts, but you have to ask directly because the fee structure varies by location and by the specific account tier.
If you need to deposit cash regularly, a traditional bank is usually your only option. Online banks cannot accept cash deposits. Credit unions can, but only at their own branches, which may not be convenient.
Credit unions: lower fees, but membership first
A credit union is a member-owned financial institution, and you have to become a member before you can open a business account. Membership requirements vary—some credit unions let anyone in your county join, others require you to work for a specific employer or belong to a specific organization, and some have no restrictions at all. You can search for credit unions in your area using the CO-OP Network locator or the Alliant Credit Union locator.
Once you are a member, credit unions typically charge lower monthly fees than banks—often $5 to $15 per month, or no monthly fee at all—and they rarely charge per-check or per-deposit fees. If you plan to borrow money for your business, credit unions often offer better rates on small-business loans than traditional banks do.
The downside is speed and convenience. Membership can take a few days to process, and credit unions have fewer branches than banks. If you need the account open today, a credit union is not the answer. If you need to deposit cash, you can only do it at a credit union branch, not at an ATM or through the mail.
Online banks: no fees, no minimums, no cash deposits
An online bank like Mercury, Brex, Novo, or Lemonade Business has no physical branches, no monthly fees, and no minimum balance requirements. You open the account entirely online—usually in 15 to 30 minutes—and it is active within one to three business days. The monthly cost is zero.
The catch is what you cannot do. You cannot deposit cash. You cannot walk into a branch if you have a problem. If a wire transfer fails or a deposit does not show up, you are dealing with customer service by phone, email, or chat. Some online banks are very responsive; others are not. Read recent reviews before you choose.
Online banks work well if you operate entirely by card, invoice, and digital transfer—if your customers pay you by bank transfer or credit card, and you pay your suppliers the same way. They do not work if you handle cash regularly or if you need to talk to a human being in person when something breaks.
What documents you need to bring or upload
Every bank, credit union, and online platform will ask for the same core documents. You need an Employer Identification Number (EIN) from the IRS—this is a nine-digit number that identifies your business for tax purposes. You can get an EIN for free from the IRS website in about 15 minutes, and it is active when ready. You do not need to have filed taxes or incorporated yet.
You also need proof that your business exists. This means a business license or business registration certificate from your state or local government, or articles of incorporation if you have formed an LLC or corporation. If you are a sole proprietor operating under your own name, some banks will let you open an account with just your personal ID and EIN, but most will ask for at least a business license.
Finally, you need a personal ID—a driver's license or passport—and your Social Security number. The bank will run a background check and verify your identity. If you are opening the account in person, bring originals. If you are opening online, you will upload photos or scans.
Timeline: how long it actually takes
An online bank is fastest. You can open the account in 15 to 30 minutes online, and it is usually active within one business day. Some online banks set up it the same day you explore.
A traditional bank is slower. If you go in person, the account is usually active the same day or the next business day. If you explore online, it can take three to five business days because the bank has to verify your documents and run a background check. Some banks will let you start using the account before all the verification is complete, but others will not.
A credit union depends on whether you are already a member. If you are, opening a business account takes one to three business days. If you are not, you have to become a member first, which can add a few days. Some credit unions let you do both at once; others make you wait.
Comparing the three routes side by side
| Factor | Traditional Bank | Credit Union | Online Bank |
|---|---|---|---|
| Monthly fee | $10–$25 (often waived with minimum balance) | $5–$15 (often $0) | $0 |
| Minimum balance | Usually $1,000–$5,000 | Usually $0–$500 | $0 |
| Cash deposits | Yes, at any branch | Yes, at member branches only | No |
| In-person support | Yes | Yes, at member branches | No |
| Time to open | Same day to 5 days | 1–5 days (plus membership time) | 1–3 days |
| Best for | Cash-heavy businesses, local presence needed | Long-term borrowing, lower fees | Digital-only operations, cost-conscious |
Frequently Asked Questions
Can I open a business checking account without an EIN?
Some banks will let you open an account using your Social Security number instead of an EIN, especially if you are a sole proprietor. However, most banks and all credit unions require an EIN. Getting one is free and takes 15 minutes online, so it is easier to get the EIN first.
Do I need to incorporate my business before opening a checking account?
No. You can open a business checking account as a sole proprietor, partnership, or LLC. You do not need articles of incorporation or formal registration—a business license is usually enough. Some banks will open an account for a sole proprietor with just an EIN and a personal ID.
What happens if I do not keep the minimum balance?
The bank charges you a monthly fee, usually $10 to $25. Some banks also charge a one-time fee the first time you fall below the minimum. If you cannot keep the minimum, choose an online bank or a credit union, both of which typically have no minimum balance requirement.
Can I switch banks later if I do not like the one I choose?
Yes. You can open a new account at a different bank and move your money over. The old bank will close the account once the balance is zero. You will need to update your business address with any vendors or customers who send you payments, and you may need to set up new automatic payments if you have any recurring bills.
Which online bank is best for a small business?
That depends on your needs. Mercury and Brex are popular with startups and tech businesses. Novo is designed for solopreneurs and freelancers. Lemonade Business focuses on very small operations. Read recent reviews and check whether the bank offers features you actually need—some offer invoicing, some offer accounting integrations, some offer nothing but a checking account.