Open a business bank account

Why this step matters

Mixing personal and company money is one of the fastest ways to create tax problems and weaken the legal separation between you and the business. A dedicated account makes bookkeeping simple, gives customers and investors a proper place to send money, and is required by most payment processors, payroll providers and startup programs.

Your bank also becomes part of your daily operations: cards for software subscriptions, payouts from payment processors, payroll, and in many cases access to perks and partner discounts.

The right choice depends on where your company is registered, where the founders live, how much cash you will hold and whether you need cash deposits, foreign currency or lending later. A US startup with non-resident founders, a UK Ltd selling mainly in euros and a funded Delaware company holding a seed round each have different needs, so compare on those rather than on marketing.

How to do it

1. Incorporate first. Banks open accounts in the company's legal name. You will need your formation documents and, in the US, an EIN. Have ownership information and ID ready for every significant owner, because banks must verify who owns and controls the business.
2. Decide between a traditional bank and a fintech. Traditional banks offer branches, cash handling and long relationships with lenders. Startup-focused fintech platforms usually offer fast online opening, built-in cards, integrations and spending controls. In the US many fintechs are not banks themselves but work with partner banks that hold deposits; read who the partner bank is.
3. Check deposit protection. In the US, FDIC insurance covers deposits at member banks up to the standard limit per depositor, per bank, per ownership category. In the UK the Financial Services Compensation Scheme protects eligible deposits at authorised banks up to its limit, while e-money institutions safeguard funds instead. If you hold more than the limit after a raise, consider providers that spread deposits across several banks, or a treasury product, and understand how each one works.
4. Compare fees and features that matter to you. Look at monthly fees, international transfers and foreign exchange, card cashback, multi-currency accounts, approval flows, accounting integrations and API access. Non-US founders with a Delaware company should check which providers accept non-resident owners.
5. Apply and deposit founder capital. Fill in the application, upload documents and answer compliance questions accurately. Once open, deposit the founders' investment for their shares so it is recorded properly.
6. Set up controls. Issue separate cards for subscriptions and ads, set spending limits, add your co-founders with the right permissions and turn on two-factor authentication.
7. Connect your bookkeeping. Link the account to your accounting software so every transaction is categorised from the start. It makes year-end filings and investor due diligence much easier.

What it costs and how long it takes

Many startup-focused accounts have no monthly fee for basic use, while traditional banks often charge monthly fees unless you keep a minimum balance. Online applications can be approved in a day or two; accounts for non-resident founders or complex ownership structures can take two weeks or more because of identity and compliance checks.

Free credits, perks and services that help

Several business banking and corporate card providers offer perk bundles, partner discounts or cashback for startups, and some are part of accelerator deal books. Compare current offers at /best/banking and browse /perks. Once the account is open, connect a payment provider from /best/payments-billing and a bookkeeping tool from /best/accounting-tax. Bootstrapped founders should prioritise no-fee accounts; see /for/bootstrapped.

Common mistakes

• Using a personal account "for now". It becomes permanent quickly and makes your first tax return painful.
• Ignoring concentration risk. Holding all your funding in one place above the insurance limit is a real risk, as the 2023 Silicon Valley Bank failure showed many startups.
• Not reading the partner bank details. With fintechs, know which bank holds your money and how protection applies.
• Weak access controls. Shared logins and cards without limits make fraud and mistakes more likely.
• Choosing on bonuses alone. A sign-up offer is small compared with fees, limits and support quality over years.

Go deeper

Compare startup banks and fintech accounts side by side at /best/banking, and see the step Take payments when you are ready to charge customers.