Hand Using Online Banking and Online Business Bank Account On Mobile Phone
Maja Mirosavljevic
By: mmirosavljevic
Read in 14 minutes

How to Set Up an Online Business Bank Account for Your Business

Online Business Bank Account.

Big words. Sound complicated. A bit scary.  So, why deal with it? You’re probably perfectly fine where you are with your business. Right? You don’t really need to open an online bank account.

Well, think again.

An online business bank account could help you up your game. It could help you save your time and energy when it comes to filing taxes and balancing your books. It could help you obtain a small business loan and provide the necessary funds for its growth. It implies a quick, hassle.free, and easy process.

Knowing all this might get you to change your mind.

Keep on reading to learn what an online business bank account is, how to open one, and discover details you should pay attention to. Let’s get started!

Man using online banking with credit card on touch screen device. Mobile banking. Digital and internet payments shopping on network connection. Bank login on a laptop screen. All on screen and credit card are design up. concept: online business bank account

Can you open a business bank account online?

Yes, even though the majority of businesses out there like to go old-school and getting a regular business bank account in a regular bank, you can open an online business bank account. Nowadays, online banks are as secure (sometimes more secure) than traditional banks, so you don’t need to worry about your money or your private information.

The advantages of an online business bank account?

As a small business owner, you need to keep your finances organized and protected, and most importantly, separated from personal funds. An online business bank account:

  • Will help you keep your business records organized. You can track your incomes and expenses, and have everything ready when the tax time rolls around.
  • Allow you to apply for a business credit card, and make you more eligible for a business loan when the time comes.
  • Will help you look more professional in front of your suppliers.

Nowadays, banks offer various online business bank accounts, so finding the right one can be confusing and overwhelming. Where to start?

Financal technology concept. FINTECH. concept: online business bank account

Setting up a business bank account: things to consider

First, let’s dive deeper into what a business bank account involves. All online business bank accounts have the characteristics listed below, but with different offers and figures. Don’t worry; it’s a no-brainer: just read carefully and pay attention to the details.

  • Number of monthly transactions allowed

If you want to open a free business checking account, then you should pay attention to how many transactions you are allowed to make for free every month. The term “transaction” refers to electronic payments, cash and check deposits, transfers, and cash withdrawals.

There is usually a limit to the number of monthly transactions you can make before a bank makes you pay a fee for every transaction. Likewise, there is often a certain number of transactions you need to make to qualify for a free account.

Therefore, think carefully about how often you will use your bank account. Also, make sure you read the small print on your business checking account agreement to check if the number of transactions fits your business needs.

  • Opening deposit

Another factor that varies when opening an online business bank account is the initial deposit amount. The downside with accounts with not many fees is that they require a larger opening deposit, a difference from accounts with higher or a lot of fees.

However, some banks offer sign-up perks, such as a cash bonus, in case you deposit and maintain a certain balance. So, it would be good to look into several banks and choose the most convenient option.

  • Average required account balance

When it comes to the average account balance, pay attention to your daily and monthly account balances. If they are high enough, you can expect fewer or no fees.

This is how banks usually make calculations: as for the average daily account balance, they add up your closing balance on every day of the bank statement period and divide that amount by the number of days in that period. As for the average monthly account balance, banks add your daily closing account balances throughout the month and divide that amount by the number of days in that month.

However, there are some other factors to consider, such as whether your balance is divided among different accounts, so get to know the bank’s specific policy.

  • Availability of physical branch

Depending on the type of business you have and your revenue manipulation, you may need to go to the bank to make deposits. This usually applies to businesses with a physical office or storefront and businesses that operate with cash as a considerable part of their revenue. In that case, the best option would be to look for a nearby bank with several branches in your state.

On the other hand, if you have an online business and sell your products or services in the form of digital transactions. Then, opening an online business bank account is not only the perfect and less expensive option for you but also you probably don’t need to worry so much about the availability of a nearby physical branch.

  • Bank size

Another point to consider when setting up an online business bank account is the size of the bank institution. Would you like to work with a large or a small bank?

There’s no right answer: both have their own advantages and disadvantages. In small banks and community banks, you will get to know the staff and get a better service, or even some convenient deals. But, maybe they won’t be so transparent with all the fees.

On the other side, big banks provide more information about your account. Therefore, you should consider your priorities when opting for a small or a big bank.

  • Connection with accounting and payment software

High-level organization sounds like a life-saver with all these figures and paperwork, right? That’s why you should look for an online business account that can be integrated with some accounting and payment software.

These tools will save your time and effort when it comes to filing taxes and balancing your books because all the payments and money withdraws will be processed and displayed right away.

Let technology be your finance assistant while you focus on your business growth.

  • Other requirements: EIN a Social Security Number

Have in mind that if your company is a corporation, partnership, or LLC, you must present an Employer Identification Number (EIN) to obtain a business bank account. An EIN is basically a Tax Number: a 9-digit number used to identify the company for banking and taxation purposes.

Sole proprietors that do not have a Tax Number may use their Social Security Number to open a business bank account.

Close up image hand using mobile phone with online transaction application, Concept financial technology (fintech). concept: online business bank account

How to set up an online business bank account

Now that you have gained theoretical knowledge, it’s time to take action and open an online business bank account. Just follow these instructions, and you’ll be good to go.

1. Find the right type of bank account

The first step in opening an online business bank account is to figure out the kind of account you need that best suits your business needs. To make the right decision, consider the factors mentioned above, like the initial amount, the average account balance, the number of transactions allowed, the availability of the bank institution, and its integration with different software.

This may be overwhelming: the best approach is to jot down your financial goals and business needs according to these parameters.

2.  Find the right bank institution

Once you’ve figured out your business needs, it’s time to find the bank that can satisfy those requirements. Luckily, nowadays, there are plenty of options and banks that offer different programs for small businesses. We listed some of the best choices previously.

Therefore, once you have listed your business needs and possibilities, go through the bank programs one by one to find your perfect match.

3. Set up an online business bank account

Finally, the last step! After this decision-making process, this is a pretty straightforward, and quick process. It will slightly vary from one bank to the other, but basically, you will have to click on “Open account” or “Apply now” once you are in the online bank tab of the bank website you chose. Fill in the required basic information about you and your business: name, address, date of birth, Social Security Number or Tax ID Number, citizenship info, ownership percentage, driver’s license/state ID… the requested information will be more or less exhaustive depending on the bank of your choice. Then, you can make your first deposit (or opening deposit, if required). That’s it! You can start using your online business bank account!

Where to set up an online business bank account

Choosing the bank that offers the most favorable conditions for opening an online business account is another critical piece of the puzzle. Here are some of the best options:

Chase Bank logo. concept: best banks for small business

  • Chase

Chase Total Business Checking is a perfect option for relatively new or small businesses.

This business account offers convenient conditions, such as a daily balance of $1,500, a $25 opening fee and up to 100 monthly transactions without a fee, plus unlimited electronic deposits. Also, Chase bank has many branches and ATMs nationwide, so it’s easily accessible, and you can quickly get your job done.

Wells Fargo logo. concept: best banks for small business

  • Wells Fargo

Wells Fargo Simple Business Checking is the ideal solution for very small businesses with limited banking activity, or home-based businesses.

This bank account has very low requirements, like a $25 opening balance, a monthly account balance of $500, and a $10 service fee. Just make sure to check the costs since they vary depending on location.

Capital-One. Best Online Banking Options

  • Capital One

Capital One Business Checking is a convenient option for businesses that deal with considerable cash flow and a high number of transactions.

This bank account offers unlimited transactions, free of charge when you make $5,000 in deposits every month, and with a $1 fee for every $1,000 deposited afterward. The monthly service fee is $15 unless your average balance is $2,000 or more.

mobile banking network. business people using mobile phone with icon application online payment. concept: online business bank account

It’s time to open your online bank account!

See? Not so scary. Not so complicated.

And just think about the benefits an online business bank account brings!

When applying for a business loan, your lender may require to access the last six months of bank transactions, and you can only do that with an online bank account. In other words, it can get you closer to the business loan you need to grow your business.

If you want to find out more about useful small business resources and educational tools that will help your business thrive, sign up for the Camino Financial Newsletter right away!


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