You need an employer identification number and state formation documents before any bank will approve you, making an entity formation service like ZenBusiness the mandatory step before you can open a business account. Once that paperwork is in hand, the Internal Revenue Service says opening a business checking account should be one of the very first things you do. You will then choose between a traditional bank with physical branches like Chase or Bank of America, or a financial technology platform like Bluevine or Novo for your daily operations.

The Internal Revenue Service Directive on Timing

The Internal Revenue Service provides unambiguous guidance on when a newly formed limited liability company should establish its banking infrastructure. In Publication 583, the Internal Revenue Service states that one of the first things you should do when you start a business is open a business checking account. The directive is meant to establish clear boundaries from the first day of operations. The agency dictates that you should keep your business account separate from your personal checking account.

If you wait until you have generated thousands of dollars in revenue, you have already created an accounting problem. Opening the account immediately ensures that your initial capital contributions and your very first deductible expenses are logged in a dedicated commercial ledger. The Internal Revenue Service also publishes guidance on how long to keep records, emphasizing that well-organized files are necessary for compliance. A dedicated checking account naturally generates the clean, separate bank statements that satisfy these underlying documentation needs without tangling personal grocery receipts with business expenses.

The Legal Necessity of Separation

The U.S. Small Business Administration takes an equally firm stance on the timing and necessity of this process. The rationale goes far beyond clean bookkeeping. It is entirely about preserving the liability shield that you paid to create when you registered the limited liability company. The Small Business Administration warns that failing to separate these funds means you risk forfeiting the legal protections that entity structures offer.

If a lawsuit occurs and a court sees that you pay personal rent out of the business account, the court may rule that the business is not a legally separate entity at all. This is why the Small Business Administration states that separation is pivotal for protecting your own assets and credit. Many new business owners mistakenly believe they can use a single personal account and simply categorize the transactions differently in software. The federal government rejects this approach. To keep personal funds and business funds completely separate you must have two different bank accounts. The Small Business Administration leaves no room for interpretation on this rule. If your company operates without a dedicated checking account, you are operating with severe legal exposure.

Preparing Your Formation Documents First

You cannot establish the necessary bank account without proving the legal existence of your company. This creates a strict sequence of events. You must form the entity, secure your employer identification number, and gather your state filings before a bank will even begin an application.

This makes formation services like ZenBusiness the logical first step before the bank. ZenBusiness does not offer business banking, issue debit cards, or hold deposits. However, it generates the precise legal paperwork the bank requires. ZenBusiness handles the state filings and the employer identification number applications. Once those documents are approved, you can take them to the bank to open your dedicated checking account. Following the successful opening of that account, you can use ZenBusiness accounting to maintain the clear records the Internal Revenue Service expects. The proper sequence is to form the entity, secure the tax documentation, open the depository account, and then implement accounting software.

Attempting to open the bank account before these documents are finalized will result in an automatic rejection. Commercial banks and financial technology platforms are legally obligated to verify the identity of the business and its owners. Once the entity is fully formed and you have the physical or digital paperwork, you can move forward with the banking application.

What the Bank Verification Process Looks Like

The specific paperwork required to pass the verification process depends entirely on the institution. What a bank actually asks for varies by bank. You should check with your chosen provider before beginning the application to ensure you have the exact documents they need.

Bank of America offers a clear baseline for what a traditional institution requires from a new limited liability company. Bank of America asks for the business name and address, the state of formation, the date established, and either an employer identification number or a social security number. It is important to note that the bank investigates the people behind the business as well. Bank of America requires personal details including a social security number and date of birth for everyone on the application, including those with at least 25 percent or more ownership. If you have four partners who each own an equal twenty-five percent share of the company, every single one of those partners must provide their personal details to the bank.

Business owners often stall their bank application because they believe they are missing an internal document. A very common misconception is that every institution demands a formalized operating agreement before they will open a depository account. Bank of America does not list an operating agreement as required. You do not necessarily need to draft a comprehensive internal operating agreement just to secure a basic checking account, though the bank may request your Articles of Organization or equivalent state filings. Furthermore, Bank of America notes that it may request trade name documentation where the business operates under a different name.

How Traditional Bank Insurance Works

Once your documents are ready, you must choose what type of institution will hold your money. Traditional banks carry specific federal protections. The Federal Deposit Insurance Corporation outlines that the deposit accounts of a corporation, partnership, or unincorporated association are insured for up to $250,000. This insurance protects your working capital if the bank itself fails.

However, the limits are strictly enforced. All accounts held by the same entity at one insured bank are combined. This is a vital rule for businesses that hold large amounts of cash. Separate accounts for different divisions or purposes do not get separate coverage. If your limited liability company has a primary checking account with $150,000 and a tax reserve savings account with $150,000 at the exact same bank, your total combined balance is $300,000. In this scenario, $50,000 of your company money is completely uninsured. To protect the excess funds, you would need to move them to a different chartered bank.

The Structural Risks of Nonbank Platforms

Financial technology companies offer modern interfaces, but they are structured entirely differently from traditional banks. The Federal Deposit Insurance Corporation clarifies that nonbank companies themselves are never FDIC-insured. Instead, these technology platforms partner with underlying chartered banks to hold your deposits.

This pass-through structure creates specific vulnerabilities. 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. While the underlying partner bank may be insured, the technology app on your phone is not.

The most significant risk involves the failure of the technology provider itself. FDIC deposit insurance does not protect against the insolvency or bankruptcy of a nonbank company. If the technology platform fails, the underlying bank may still hold the funds, but the interface and ledger systems may freeze. Recovery then runs through an insolvency or bankruptcy proceeding. The Federal Deposit Insurance Corporation warns that this process may take some time. During a prolonged bankruptcy proceeding, your business may be unable to access its working capital to make payroll or purchase inventory. You must balance the convenience of a nonbank interface against these structural risks.

Comparing Your Business Banking Options

The market offers a mix of traditional banking institutions and financial technology platforms. The providers below are listed alphabetically rather than as a ranking.

Bank of America

Bank of America is a traditional national bank with a large physical branch network. As of October 6, 2026, Bank of America offers a Business Advantage Fundamentals Banking tier for $0 or $16 per month. There is no monthly fee for the first 12 months on this Fundamentals tier. After the introductory period ends, the fee is waived by a $5,000 combined average monthly balance, $500 in new net qualified debit card purchases, or Preferred Rewards for Business membership. Bank of America also offers a Business Advantage Relationship Banking tier for $0 or $29.95 per month.

Bluevine

Bluevine operates as a financial technology company serving small businesses. As of October 6, 2026, Bluevine offers a Standard plan for $0 per month, a Plus plan for $30 per month, and a Premier plan for $95 per month. The annual percentage yield is 1.3 percent on the Standard tier subject to a monthly activity goal. This yield increases to 1.75 percent on the Plus tier and 3.0 percent on the Premier tier. The monthly fees for the Plus and Premier tiers are waivable based on stated balance and activity requirements.

Chase

Chase is a major national bank providing in-person branch services and comprehensive online tools. As of October 6, 2026, Chase prices its Business Complete Banking account at $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 is a financial technology platform built primarily for startups and technology companies. As of October 6, 2026, Mercury offers a base account for $0 per month. The Plus tier is $29.90 per month, and the Pro tier is $299 per month. Because Mercury is a nonbank company, funds you send to the platform are not eligible for FDIC insurance until the company deposits them in an FDIC-insured bank.

Novo

Novo operates as a financial technology platform focusing on integrations with existing software tools. As of October 6, 2026, Novo charges $0 per month, carrying no monthly maintenance fee. As a nonbank entity, it relies on partner banks to hold deposits. Novo accounts face the standard structural considerations regarding the failure of a nonbank company, where recovery runs through a bankruptcy proceeding and may take some time.

Relay

Relay is a financial technology company designed to manage cash flow through multiple checking accounts and dedicated debit cards for team members. As of October 6, 2026, the Relay Starter plan is $0 per month. The Grow tier costs $30 per month, and the Scale tier costs $90 per month. Relay provides granular control over spending across different departments within the limited liability company.

U.S. Bank

U.S. Bank provides a traditional banking experience with extensive physical branch access. As of October 6, 2026, U.S. Bank prices its Business Essentials account at $0 per month. The Gold tier is $20 or $0 per month, which is waived by holding a merchant account, maintaining a $10,000 average collected balance, or meeting larger combined balance thresholds. The Platinum tier is $30 or $0 per month, waived by a merchant account or a $25,000 average collected balance. The Premium tier is $34 per month.

ZenBusiness

ZenBusiness does not provide banking products, deposit accounts, or debit cards. It operates entirely as an entity formation and compliance service. You will use ZenBusiness to formally register the limited liability company with your state and obtain your employer identification number. Securing these documents is the required step to pass a bank verification check before you open your depository account.

Sources

This article provides general information and does not constitute legal, tax, or accounting advice, and requirements vary and change over time.