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Updated: Aug. 30, 2024
Setting up a business bank account is one of the most important things you can do as the owner of a limited liability company (LLC).
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 from lawsuits by keeping your personal finances separate from 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 owner like yourself and improve your cash flow.
The first step in opening a bank account is to find the best business checking account for LLC owners. This task used to be simpler, but due to the rise of decentralized banking, LLC owners now have to choose between a traditional bank and an online bank. Both have pros and cons.
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.
The perks of online banking are the minimal to non-existent account fees. But there’s always a downside.
Because online banks don’t have their own ATMs like traditional banks, you must find ATMs within the network. This setup 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 specifically designed for small businesses.
So, which bank account is best for LLC owners? There’s no straightforward answer. It all depends on your needs and goals. What works for you might not work for someone else, so spending time shopping around for the right bank would be best.
When opening a business bank account, you want to ensure that your chosen banking institution meets all your LLC’s needs. It’s very common for banks to highlight enticing perks in their advertisements, but some of these perks come with certain conditions.
For example, an online bank may offer you a savings account with an annual percentage yield (APY) worth 3%, but you need to maintain a minimum balance of $50,000 to get this APY. This arrangement may not be feasible for startups and other smaller businesses.
Many banks also offer 1% cash back for each credit and debit card transaction, but this benefit may only apply to specific merchants. If you’re not a frequent buyer of these merchants, you won’t be able to take advantage of this perk.
It’s also important to consider the different accounts your chosen banks offer. A single business checking account is ideal for smaller LLCs, but those with employees may need multiple accounts.
They may need a separate account for payroll and another for daily operations. Some even use high-yielding savings accounts for extra funding on their balance sheets.
It would be best if your bank had other useful account features, like free employee debit cards, ATM rebates, free wire transfers, and direct integration to business tools. These perks can help improve your LLC’s operations down the line.
If you’re having trouble choosing a bank, below are a few questions you can use as a guide:
Want to remove all the guesswork? When you form your business with Inc Authority, you gain access to a free Bank of America business checking account with exclusive incentives!
Setting up an LLC bank account is relatively easy. Here’s how:
Most LLCs use business checking accounts as their default business accounts. These accounts can be used for daily expenses, such as accounts payable and receivable.
If you want to open another account for your payroll, ask your bank if you can open multiple accounts in one go.
The requirements for opening an LLC bank account vary from one bank to another, but generally, you’ll have to provide the following documents:
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.
After completing all the steps above, gathering your documents, and opening your account, depositing your funds is time. You can do this in several ways:
Before heading to the bank to deposit your check, ask your bank to see if they offer remote deposit capture. If they do, you can deposit from anywhere.
Once you’ve made your first deposit, you can slowly start moving some of your LLC’s assets into the new bank account. Some banks have longer deposit holds for new accounts, lasting 10 days. Other institutions will flag large transactions for fraud, so gradually moving your funds would be best.
If your bank has an online banking platform, log into your account and set alerts. Decide who will be allowed to sign on the account. This step is crucial for multi-member LLCs.
Start adding additional users for your accountants who will handle your account payables. Set account permissions depending on their roles. For instance, you could give your primary accountant full access to view and approve transactions and limit your other accountant’s access to read-only.
Lastly, connect your new business bank account to your bookkeeping software. This step will help you streamline your accounting processes.
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.
Lucky for you, when you use our 100% LLC setup service, you gain access to a free Bank of America business checking account and other free business management tools to make operating your startup a breeze. Contact us today to get started!
Incorporating is the most powerful way to legitimize your startup. At IncAuthority.com, our LLC setup services are 100% free—always. So, don’t wait. Visit our website here to form your free LLC today.
Incorporating is the most powerful thing you can do to legitimize your startup. And at IncAuthority.com, our setup LLC services are 100% free. Always. So, don’t wait. Form your new LLC today and enjoy the protection due to you and your business under the law.
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