Rachel Green
Most articles about opening a business bank account spend 800 words telling you to “gather your documents” and then stop. That’s not advice. That’s a checklist you could’ve written yourself. So let me cover what actually matters, including the part where most startups make an expensive mistake in the first 90 days.
This decision matrix compares the major online-first business banks across criteria that actually matter for startups in their first two years.
| Bank | Monthly Fee | APY on Balances | Sub-Accounts | Approval Speed | Best For | Key Limitation |
|---|---|---|---|---|---|---|
| Mercury | $0 | None on basic | Unlimited | 1-3 business days | Tech/product startups planning to raise capital | No cash deposits; limited integrations with traditional accounting |
| Relay | $0 | None | Up to 20 | 1-2 business days | Service businesses using profit-first or envelope budgeting | No interest earnings; no physical branch access |
| Bluevine | $0 | Up to 2%+ (variable; check current rates) | 1 primary | 1-2 business days | Businesses holding $20K+ in operating reserves | Fewer sub-accounts; interest tiers require minimum balances |
| Novo | $0 | None | Reserve buckets | 1-3 business days | Freelancers and microbusinesses wanting app integrations | Slower customer support response times reported |
| Chase Business Complete | $15 (waivable) | None | 1 primary | Same day (branch) or 3-5 days online | Businesses planning SBA loans or needing cash deposit access | Fee requires $2K minimum balance to waive; fewer startup-friendly features |
Illustrative general information, confirm current figures for your situation.
Why the Bank You Pick at Month One Usually Stays
Switching business bank accounts is annoying. You’ve got ACH setups, connected apps, maybe a Stripe or PayPal integration, vendor autopays sitting there. Changing all of that takes half a day minimum, and most owners never do it. So that account you open in a panic during week two of your business? That’s the one you’ll probably use for five years.
Pick with that in mind.
The good news is online business banking has actually gotten good. Mercury, Relay, Bluevine, and Novo all offer free accounts built specifically for startups. You don’t have to walk into a branch. Most approve you within 24 to 72 hours. I’d pick Mercury for most early-stage tech or product companies, and Relay if you need multiple spending envelopes or want to run a profit-first system (it supports up to 20 sub-accounts). Bluevine pays a decent APY on balances, which starts mattering once you’re holding real cash reserves.
Traditional banks like Chase Business Complete Banking? Only consider them if you’ll need SBA loans or business credit fast. The relationship still counts, even now.
What You Actually Need to Apply
Helpful resource: Avery Business Card Binder for Networking is a top-rated option for this. (As an Amazon Associate this site earns from qualifying purchases.)
Here’s where the “gather your documents” articles fail you. The list isn’t the same for every business structure, and some documents trip people up because they don’t exist yet.
For a sole proprietor, it’s simple. You need your Social Security number, a DBA (Doing Business As) certificate if you’re operating under a name other than your own, and a government-issued ID. Some online banks will open an account with just that in under 10 minutes.
LLCs and corporations ask for more. You’ll need:
- Articles of Organization (LLC) or Articles of Incorporation (corporation), filed and stamped by your state
- Your EIN (Employer Identification Number) from the IRS, which you can get free at IRS.gov in about five minutes
- Your operating agreement (LLC) or bylaws (corporation)
- Ownership information for anyone with 25% or more stake in the business, per federal beneficial ownership rules
That last one comes from FinCEN (Financial Crimes Enforcement Network) regulations, not the bank being difficult. Every bank has to collect it. The Consumer Financial Protection Bureau’s small business resources break down what these rules actually mean if you want the plain-language version.
One thing that trips people up: if your LLC was formed less than a week ago, some banks won’t move forward without a stamped state filing. You can usually get a same-day or next-day copy if you filed online through your state’s secretary of state portal. Just plan for a short wait.
The Actual Application Process, Step by Step
Here’s what it looks like in real life. I’m walking through Mercury because it’s the most streamlined I’ve seen, but the sequence is basically identical at Relay and Novo.
1. Go to the bank’s site and start the application. Mercury asks for your legal business name and state of formation first. Use the exact name on your Articles of Organization, not your DBA.
2. Enter your EIN. Not your SSN. Haven’t got your EIN yet? Go to IRS.gov first. It takes five minutes and costs nothing.
3. Upload your formation documents. A clear phone photo of your stamped Articles works fine. It doesn’t need to be a notarized copy.
4. Verify your identity. You’ll scan a driver’s license or passport, sometimes with a live selfie. This occasionally fails on the first try if your ID photo is blurry. Use good lighting.
5. Add ownership information. Anyone who owns 25% or more needs to provide their name, address, date of birth, and SSN. This is federal law, not optional, even if they’re not involved in day-to-day work.
6. Fund the account. Most online business banks have no minimum opening deposit, or just $25. Mercury requires nothing. You’ll link a personal account to make the initial transfer.
7. Wait. Approval usually comes within one to three business days. Sometimes faster. If you’re flagged for manual review, someone from the bank will email asking for more documentation. Don’t panic. It happens to legitimate businesses all the time, especially brand-new ones.
The Mistake That Costs You Later
Don’t mix personal and business money. You’ve heard this before. But I’ve watched enough founders sweating through their first-year tax prep to know that most of them did exactly that for the first few months, “just until things got settled.”
Once it’s mixed, you spend hours reconstructing which charges were business expenses. Your bookkeeper charges you for that time. Your CPA charges you for that time. And if you’re audited, a commingled account is one of the first red flags. The SBA explicitly recommends keeping them separate from day one, and they’re right.
Open the account before your first dollar of revenue comes in. Even if it’s just an idea with a freshly filed LLC, open it now. It’s free and saves you a painful mess later.
A solid bookkeeping habit from the start helps too. If you want a framework that actually works, Mike Michalowicz’s Profit First (Amazon, commission may apply) is what I recommend most to first-time founders. It builds a cash management habit that sticks.
One Account or Several?
For most startups in year one: one checking account is enough. Keep it simple. Complexity before you have revenue is procrastination wearing a disguise.
That said, if you tend to spend whatever’s in the account (most of us do), a two-account structure works well early. One operating account for incoming revenue and bills, one tax reserve account where you park 25 to 30% of every deposit. Make that second account slightly harder to access so you’re not tempted to raid it for a software subscription. Relay makes this easy with sub-accounts. Mercury requires a second account application (five minutes) but it’s a touch less elegant.
Once you have payroll, contractors, or multiple revenue streams, it’s worth talking to a CPA about how to structure things around your actual tax obligations. Don’t guess at the percentages.
Sources & References
- SBA, Choose a business bank account, Supports requirements for opening business bank accounts
- IRS, Employer Identification Number (EIN), Supports EIN requirements for business banking
- FDIC, Deposit Insurance Overview, Supports understanding of business deposit protection
Photo: Tima Miroshnichenko via Pexels
This article is for general informational purposes only and does not constitute financial, tax, or legal advice. Business finance and tax rules vary by entity type, state, and individual circumstances. Consult a qualified CPA, enrolled agent, or business attorney for advice specific to your situation.
Recommended Resources
Disclosure: As an Amazon Associate, we earn a small commission from qualifying purchases at no extra cost to you. We only recommend products that genuinely support the topics covered in this article.
- Mastering QuickBooks 2025 (~$32), The most comprehensive QuickBooks 2025 guide, covers bookkeeping, payroll, invoicing, tax prep, and cash flow.
- Accounting for Small Business Owners (~$14), Beginner-friendly accounting guide covering basic bookkeeping, financial statements, and managing business taxes.
