Setting up a business bank account, for LLC owners, is one of the most important things you could do for your startup.
Why? Because an LLC business account helps you manage a cash balance, deduct business expenses for taxes, conduct proper accounting, and execute employee payroll. It also provides better protection if legal action is taken against your business.
Additionally, opening a business bank account for an LLC creates historical relevance through the relationship established with the bank. This relationship can create unrestricted access to long-term funding options, business credit cards, and other financial solutions.
In this blog post you’ll learn how to open a bank account for an LLC, so you can improve your cash flow.
The Best Business Bank Accounts for LLC Owners
The first step in opening a bank account is to find the best business checking account for LLC owners. This use to be simpler, but due to the rise of decentralized banking, LLC owners now have to choose between a traditional bank or an online bank. Both come with pros and cons.
Best traditional bank for your LLC account
- Bank of America: Best overall for cash deposits and a big introductory bonus
- Chase Bank: Best for a free checking account with low monthly deposits
- Capital One: Best for low-cost checking with unlimited transactions
- U.S. Bank: Best for making few monthly transactions
- Wells Fargo: Best for flexibility when upgrading account services as a company grows
Another thing to consider when choosing a traditional bank is how many branches they have nationwide. This is especially true if you travel a lot. Out of every bank on the list, Wells Fargo has the largest number of branches, covering most of the US.
Best online LLC bank account
- BlueVine — Best online banking for small businesses and loans
- Novo — Simple online-only business checking account with no hidden fees.
- Axos Bank — Online-exclusive bank with interest-bearing checking solutions.
- Chase Business Complete BankingSM — Best online business checking accounts for businesses of all sizes.
- TIAA Bank — Best high-interest checking for sole proprietors and single member LLC bank account holders.
The perks of online banking are the minimal to non-existent account fees. But there’s always a downside.
You see, because online banks don’t have their own ATMs (like traditional banks) that waive any fees, you have to find ATMs that are within network. This can be difficult if you live in a small town.
Out of every online bank on the list, BlueVine is the best overall with a 38,000 ATM network to draw on, live support, unlimited transactions for checking, and more. They’re also the only online bank that’s specifically designed for small businesses.
The short answer to the question of “what’s the best bank account for LLC owners” is that there is no best business account for LLC owners. What works for you might not work for someone else.
Factors to consider before making a decision
- Do you have an existing banking relationship? If you have a reputation established with a bank, it may be easier to open an account.
- How affordable is the bank? Consider the costs each bank may charge like fees for monthly servicing, deposits, and ATM use.
- Are there plenty of locations? Make sure the location, as well as the number of ATMs and branches, suits your needs—especially if you’re considering an online bank.
- Is their online platform user-friendly? Make sure your bank offers a good online experience, including easy online bill pay and mobile deposits.
- What does their bookkeeping integration look like? Ensure your bank account and bookkeeping software integrate.
- Will they support your future needs? You’ll probably need more than just an LLC bank account, so, make sure your bank offers small business loans, lines of credit, and credit cards.
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Gathering the Required Documents
Now that we’ve broken down know how to choose the best business bank account for LLC success, let’s break down what you’ll need to open your account.
In most cases when you open a business account, you have to provide documentation that verifies the name and type of business. You may also need to show proof that your business is registered with the IRS (like an EIN). This indicates that you have the legal authority to set up the account.
Let’s look at the requirements to open a LLC bank:
- Business identification: You’ll need your federal EIN and a copy of your articles of organization.
- Organizational documents: You can’t open an LLC account without providing the organizational documents used to form either your S-corp or partnership.
- Other potential documentation: Lastly, you may need to provide a signed declaration of unincorporated business and any required business licenses.
Once you’ve gathered all the required documents, you’ll have to open your account in person or online depending on the type of bank you’ve chosen.
Deposit Funds Into your LLC Bank Account
After completing all the steps above, gathering your documents, and opening your account, it’s time to deposit your funds. You can do this a number of ways:
- Write a check to your business account from your personal account
- Make an electronic funds transfer between bank accounts
- Deposit cash
Before heading to the bank to deposit your check, check with your bank to see if they offer remote deposit capture. If they do, you can deposit from anywhere!
To protect the liability protection afforded to you by your LLC, you must separate your business expenses from your personal expenses with a business bank account.
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