The Internal Revenue Service states that opening a business checking account is one of the first things you should do when starting a business. If you are forming a new LLC, the most efficient first step is securing your entity paperwork and EIN through a formation service like ZenBusiness, because financial institutions require those legal documents before they will open an account. If your paperwork is already in order, a dedicated business bank or fintech platform will serve your LLC best, with options ranging from no-fee digital accounts like Novo to traditional branch-based institutions like Bank of America.

Why an LLC needs a separate bank account

The legal framework of a Limited Liability Company rests entirely on the distinction between the owner and the business entity itself. The Internal Revenue Service advises in Publication 583 that one of the first things you should do when you start a business is open a business checking account. The agency explicitly instructs founders to keep the business account separate from their personal checking account.

This is a legal necessity rather than a mere bookkeeping suggestion. The U.S. Small Business Administration warns that failing to keep these funds completely separate means you risk forfeiting the legal protections that entity structures offer. If a lawsuit is brought against an LLC, opposing counsel will look for evidence that the business is merely an alter ego of the owner. Commingling funds by paying a personal utility bill from the business checking account, or depositing a client check into a personal savings account, allows courts to pierce the corporate veil.

The U.S. Small Business Administration stresses that separation is pivotal for protecting your own assets and credit. To achieve this separation, the agency states you must have two different bank accounts. A dedicated business account establishes a distinct financial history for the LLC and ensures your personal assets remain shielded behind the liability barrier you formed the company to create.

Bank accounts and IRS recordkeeping rules

A dedicated business checking account simplifies tax time and ensures compliance with federal recordkeeping rules. According to the Internal Revenue Service, good records help you monitor the progress of your business, prepare your financial statements, identify sources of your receipts, and keep track of deductible expenses. Running all LLC transactions through a single personal account forces you to manually identify the sources of receipts and separate business from personal expenses, which increases the likelihood of errors and audit complications.

A clean bank account provides the clear trail of deposits and withdrawals needed to maintain records for the required duration. The Internal Revenue Service states in its guidance on recordkeeping that the period of limitations for income tax returns is generally three years. However, this period can extend to six years if you do not report income that you should report, and it is more than 25 percent of the gross income shown on your return. Operating exclusively out of a business checking account makes it much easier to satisfy these retention requirements without sifting through years of unrelated personal transactions.

What an LLC needs before opening an account

Opening an account for an LLC is fundamentally different from opening a personal checking account because of the documentation required. A financial institution must verify that the corporate entity legally exists and must identify who actually controls it.

What a bank actually asks for varies by bank. Bank of America, for example, asks for the business name and address, the state of formation, an Employer Identification Number or Social Security Number, and the date established. Federal regulations require banks to understand the ownership structure of the businesses they serve. Accordingly, Bank of America asks for personal details including the Social Security Number and date of birth for everyone on the application, including those with at least 25 percent or more ownership.

The documentation requirements extend to the entity's foundational paperwork. Bank of America may request the Articles of Organization or equivalent, and trade name documentation where the business operates under a different name. Interestingly, Bank of America does not list an operating agreement as required, though having one on file is considered a best practice for multi-member entities.

The paperwork provider

Because an LLC cannot open a banking product without formation documents and an Employer Identification Number, securing that paperwork is the necessary step before approaching a financial institution. ZenBusiness provides entity formation and compliance services for new businesses. It is not a bank and does not offer banking services. Instead, it handles the filing of your Articles of Organization, registers your business with the state, and obtains the EIN from the Internal Revenue Service.

Completing these steps generates the exact legal paperwork a bank will demand during the application process. As part of establishing the financial foundation for a new entity, founders can also utilize a ZenBusiness accounting consultation to outline bookkeeping requirements before they begin processing business transactions.

Understanding banks, fintechs, and deposit insurance

When evaluating where to place an LLC's operating cash, it is critical to understand the difference between a chartered bank and a financial technology company. The Federal Deposit Insurance Corporation outlines that the deposit accounts of a corporation, partnership, or unincorporated association are insured for up to $250,000. It is important to note how this limit is applied. All accounts held by the same entity at one insured bank are combined. Setting up separate accounts for different divisions or purposes at the same institution does not grant separate coverage.

Many modern digital business accounts are provided by fintech platforms rather than traditional institutions. The Federal Deposit Insurance Corporation states clearly that nonbank companies themselves are never FDIC-insured. Funds you send to a nonbank company are not eligible for FDIC insurance until the company deposits them in an FDIC-insured bank and after other conditions are met.

The distinction matters most in a crisis. Furthermore, FDIC deposit insurance does not protect against the insolvency or bankruptcy of a nonbank company. If the fintech platform fails, you will not deal with the FDIC to recover your funds. Instead, recovery runs through an insolvency or bankruptcy proceeding, which the agency warns may take some time.

Comparing the business bank accounts for an LLC

The options below represent a mix of chartered banks and financial technology platforms. They are listed alphabetically rather than as a ranking. All pricing and fee details are current as of October 6, 2026.

Bank of America

Bank of America offers traditional branch access and a clear set of documentation requirements for new LLCs. It provides two main checking tiers. Business Advantage Fundamentals Banking costs $0 or $16 per month. The ongoing cost is $16 per month, but Fundamentals has no monthly fee for the first 12 months. After that promotional period, the fee is waived by maintaining a $5,000 combined average monthly balance, making $500 in new net qualified debit card purchases, or holding Preferred Rewards for Business membership. The higher tier, Business Advantage Relationship Banking, costs $0 or $29.95 per month. As a traditional bank, it demands clear beneficial ownership disclosure, requiring personal details for any individual holding 25 percent or more ownership in the LLC.

Bluevine

Bluevine is a financial technology company catering to small businesses. It offers three account tiers. The Standard plan has a $0 monthly fee. The Plus plan costs $30 per month, and the Premier plan costs $95 per month. Both the Plus and Premier monthly fees are waivable based on balance and activity requirements. Bluevine provides yield on business deposits. The APY is 1.3 percent on the Standard tier subject to a monthly activity goal, 1.75 percent on the Plus tier, and 3.0 percent on the Premier tier. This makes it a strong option for LLCs that hold cash reserves and want to earn a return.

Chase

Chase is a traditional bank with a massive national footprint, making it a reliable option for retail LLCs or businesses that handle physical cash daily. Chase Business Complete Banking costs $15 per month. The Performance Business Checking tier is $40 per month, and the Platinum Business Checking tier is $95 per month. Each of these monthly fees is waivable on stated balance or activity conditions.

Mercury

Mercury focuses on tech startups and digital companies, though it is available to standard LLCs looking for a digital-first financial platform. Mercury is a fintech company, meaning it relies on partner banks to hold deposited funds. It has a $0 per month base tier. The Plus tier is $29.90 per month, and the Pro tier costs $299 per month.

Novo

Novo is a financial technology platform designed for freelancers, solopreneurs, and small LLCs. It has a $0 per month cost, with no monthly fee. Novo operates entirely online and partners with a traditional bank to provide backend deposit services. Because it lacks physical branches, it is less suited for businesses that need to deposit physical cash.

Relay

Relay is a digital platform built around cash flow visibility and multiple accounts. The Relay Starter tier costs $0 per month. The Grow tier is $30 per month, and the Scale tier is $90 per month. Relay allows an LLC to spin up multiple checking accounts, which helps satisfy the separation of funds by allowing owners to isolate operating expenses from tax reserves. Like the other digital platforms, Relay partners with chartered banks to provide deposit capabilities.

U.S. Bank

U.S. Bank offers a standard traditional banking experience for an LLC that wants branch support. The Business Essentials tier costs $0 per month. The Gold tier costs $20 or $0 per month, the Platinum tier costs $30 or $0 per month, and the Premium tier costs $34 per month. The fee on the Gold tier is waived by holding a merchant account, maintaining a $10,000 average collected balance, or meeting larger combined balances. The Platinum fee is waived by holding a merchant account or a $25,000 average collected balance.

Sources

This article is for general information purposes only and does not constitute legal, tax, or accounting advice; requirements vary by jurisdiction and are subject to change.