How to Open an LLC Bank Account: A Step-by-Step Guide

Published Thursday 25th September 2025

Table of contents

• What is a limited liability company (LLC)?
• Why is it important to open a business bank account?
• Required documents for an LLC bank account
• Types of business bank accounts for LLCs
• How to choose the right bank for your LLC
• Step-by-step process to open your LLC bank account
• Managing your LLC bank account
• Handle your business finances more easily with Xero accounting software
• FAQs on opening a business bank account for an LLC

Key takeaways

• A separate business bank account protects your LLC’s liability status and simplifies your tax preparation.
• At a minimum, you’ll need your LLC’s EIN, Articles of Organization, and your ID to open your account.
• Choosing a bank and account type that helps you manage fees, protect cash flow, and facilitate growth.

What is a limited liability company (LLC)?

A limited liability company (LLC) is a popular way to structure your business. It helps protect your personal assets from business debts and liabilities.

Key LLC benefits for banking:

• Legal separation: Clear distinction between personal and business finances
• Liability protection: Personal assets stay protected from business debts
• Tax advantages: Simplified reporting when finances are properly separated

Why is it important to open a business bank account?

A business bank account protects your limited liability and makes managing your finances easier.

There are three ways a business bank account helps your LLC.

Protecting your limited liability

Open a separate business bank account for your LLC. Avoid using it for personal expenses to keep your business and personal finances separate.

Keeping your finances separate helps maintain your LLC's protection for your personal assets.

Simplifying bookkeeping and tax filing

Keeping all your business expenses in one account makes bookkeeping and tax preparation easier. The IRS requires single-member LLCs to use their own name and employer identification number (EIN) for employment taxes.

You can connect most business bank accounts to Xero accounting software for a smoother process.

Establishing credibility with banks and lenders

Lenders use your business bank account to review your revenue and expenses. This helps when you apply for loans or credit terms with vendors.

Required documents for an LLC bank account

Each bank may have slightly different requirements, but you'll usually need a few key documents to open your account.

Have these documents ready:

• Your LLC's Employer Identification Number (EIN) or tax ID number
• Your LLC's Articles of Organization
• A government-issued photo ID for each person authorized to sign on the account

Some banks may also require:

• Your LLC's operating agreement
• Business licenses or permits required by your state or city
• A trade name or 'doing business as' (DBA) certificate if you operate under a different name
• A signed declaration of beneficial ownership for anyone who owns 25 percent or more of the LLC. As of 2024, many businesses must report information about their beneficial owners to the Financial Crimes Enforcement Network (FinCEN).

Types of business bank accounts for LLCs

Banks offer several types of business accounts. Knowing your options helps you choose the best account for your LLC.

• Business checking account: This is the workhorse for your daily operations. Use it for paying bills, making purchases, and depositing customer payments.
• Business savings account: A savings account is a great place to set aside money for future goals, like paying taxes, buying equipment, or building an emergency fund. These accounts typically earn interest.
• Money market account: This account often combines features of both checking and savings accounts. It may offer a higher interest rate than a standard savings account and allow for a limited number of transactions per month.

Tips for choosing the right bank for your LLC

Choose a bank that understands small businesses and offers the services you need to grow.

Consider these factors when choosing a bank:

• Fees and requirements: Compare monthly maintenance fees, transaction limits, and minimum balance requirements. Look for accounts that fit your transaction volume without adding unnecessary costs.
• Services and features: Does the bank offer online and mobile banking, bill pay, and other digital tools? Consider whether you need access to services like payroll, merchant services, or business loans.
• Location and access: If your business handles cash, having a physical branch nearby is important. Check the bank's hours and ATM network to ensure they fit your schedule.
• Software integration: Make sure the bank's online services can connect to your accounting software. A smooth bank feed integration saves you time and makes bookkeeping much easier.

How to open your LLC bank account

To open an LLC bank account, gather your documents, choose a bank and account type, and complete the application. Follow these steps:

1. Gather the documents you need

You need three key documents to open your LLC bank account. These show your business is legal and you have authority to open the account.

Essential documents:

• EIN (Employer Identification Number): Your LLC's federal tax ID
• Articles of Organization: Legal formation documents filed with your state
• Government-issued ID: Driver's license or passport for the account signer

Apply for your employer identification number (EIN) on the IRS website after you form your LLC. The process takes a few minutes online.

The application times out after 15 minutes of inactivity, so have your information ready.

2. Choose the right bank

Choose a bank that offers the services, costs, and convenience your business needs.

Key selection criteria:

• Fee structure: Monthly maintenance, transaction limits, and overdraft charges
• Business services: Online banking, mobile deposits, and integration capabilities
• Location access: Branch proximity and ATM availability for cash deposits
• Growth support: Credit products and merchant services for scaling

3. Choose the account type

Business account types have different features and fees. Most LLCs start with a business checking account and add others as needed.

Common account types for LLCs:

• Business checking: Daily transactions, bill payments, and payroll processing
• Business savings: Emergency funds and tax reserves with higher interest rates
• Money market accounts: Higher balances with limited transactions and better rates

Comparison factors:

• Monthly fees: Fixed costs vs. transaction-based pricing
• Transaction limits: Free monthly transactions before fees apply
• Minimum balance: Required balance to avoid fees or earn interest
• Interest rates: Earnings potential on account balances

4. Apply at the bank or online

Most banks require you to apply in person, but some let you open accounts online. Have your documents ready before you start.

5. Gather extra documents needed for an LLC bank account

Some banks may also ask for:

• Other certifications, like a trade name certificate and a fictitious name certificate, or a doing-business-as (DBA) certificate if the business operates under a name other than the entity's legal name
• An operating agreement
• A declaration of beneficial ownership – the bank will give you a form to sign for this
• Business licenses or permits

Handle your business finances more easily with Xero

After you open your account, use it to manage your business finances. Your business bank account helps you track income and expenses and manage cash flow.

Connect your account to Xero accounting software to automate your bookkeeping. Bank feeds bring your transactions into your books automatically. This gives you a real-time view of your finances and makes tax time easier.

Get one month free and see how easy it is to manage your business finances.

FAQs on opening a business bank account for an LLC

Here are some common questions about opening a business bank account for your LLC.

What are the legal and tax implications of not opening a separate business bank account for an LLC?

Not separating your business and personal finances can weaken your LLC's limited liability protection. You may also miss business income or expenses, which can lead to mistakes on your tax return.

How does opening a business bank account for an LLC affect my ability to secure loans or lines of credit?

A business bank account helps you stay organized. Lenders use your account records to assess your business's creditworthiness.

I share a multi-member LLC. How should I organize its banking access and account management to make it secure and compliant with regulations?

List the signatories and set account access rules in your operating agreement. If more than one person has access, require dual authorization for major transactions to keep your account secure.

How can I use my LLC's business bank account to better manage my cash flow?

Your LLC's business bank account helps you track income and expenses. Xero accounting software connects to your bank account, so you can automate payments and bring all your transactions into one place. You can also open multiple accounts to separate funds for taxes or savings.

What happens if I use a personal bank account for my LLC's transactions?

A business bank account keeps your business and personal finances separate. This helps protect your LLC's limited liability and makes tax reporting easier.