Opening a startup bank account involves completing a series of steps in a specific order. These include forming your company, getting an Employer Identification Number (EIN), gathering your ownership and authority documents, applying with a bank, and funding the account.

There are over 2 million startups in the US, and the time it takes to open a bank account depends on the business type. Obtaining a bank account can usually be completed in a day for a single-founder limited liability company (LLC), while the process for a multifounder corporation with investors takes longer.

Below, we'll explain each step to opening a startup bank account, the required documents, and how to choose the best account for your stage of development.

Key takeaways

• There are several steps to opening a bank account. These range from incorporating your company and obtaining an Employer Identification Number (EIN) to applying for a bank account and funding the account. Skipping any of these steps can result in a stalled or rejected bank account application.

• Banks verify every startup owner above the ownership threshold, as well as one person who controls the company, so your cap table will affect how long bank account approval takes

• The right bank account depends on your startup's banking needs, whether it's to receive an investor's electronic transfer, collect customer payments, or issue cards to a growing team

How do I apply for a startup bank account?

The application process for a startup business bank account includes several steps.

Here's how to complete them in the right order:

Form the company

Your company needs to be legally established before a bank can open an account for it, so start by filing the paperwork to create a corporation or LLC.

Get an EIN

Once your entity is formed, apply for an EIN from the Internal Revenue Service (IRS), which can be done online. The IRS confirmation letter is one of the first documents the bank will ask for.

Apply with your chosen bank

Next, pick a bank and submit the application for an account. Be prepared to answer questions about your structure, your owners, what the company does, and expected banking activity (e.g., where incoming money will come from). The bank will verify each signer's identity. Federal rules require banks to collect information on anyone who owns 25% or more of a company, and on one person who controls it, so your cap table helps determine whose information you'll need to provide.

Fund the account

After approval, fund the account. Founders usually transfer in their initial capital. However, if you've raised a pre-seed funding round or issued Simple Agreements for Future Equity (SAFEs), investors will need your account and routing details to send their money. In most cases, the account must exist before the funding round can close.

Plug the account into the rest of your startup's finances

Connect a payment provider so your account can receive customer payments, load cards for vendor spend, sync with accounting software, and enable payroll once you start hiring. Accounts that aren't connected end up holding a few deposits while you handle everything else manually.

What documents and information do you need to gather before opening a startup bank account?

Startup bank account applications require the same documents. Consider gathering them in one folder before you apply.

Here's what you'll need:

• Formation documents: Your certificate of incorporation or articles of organisation, filed with your state, which proves the company legally exists

• EIN confirmation letter: The IRS notice that assigns your company's tax ID, which the bank uses instead of a founder's Social Security number (SSN) to identify the business

• Bylaws or operating agreement: Provide the document required for your entity type, which explains how the company is run and who can act for it

• Board consent or authorising resolution: Corporations and LLCs often need to submit a signed document that authorises the account opening and names who can sign for it

• Ownership details: Names, addresses, and ownership percentages for every owner who holds 25% or more, plus the person who controls the company

• Government-issued ID: A passport or driving licence for each signer

• Licences or permits: Required if your state or industry mandates them

What are the timelines and approval factors for a startup bank account?

Banks need to confirm that your company is legally formed and who's operating it. Beyond that, approval speed depends on how complete your documents are, how many owners need verification, and what you're asking the bank to provide.

Here are the typical timelines by bank type:

• Digital-first banks: Same day to two days for a single-owner application completed online

• Traditional banks: Three to ten working days, or longer when an in-branch visit or manual review is involved

Multiowner entities take longer when the bank needs documents from several owners, notarised forms, or in-person visits. There are also a few approval factors that can affect timing:

• Owner eligibility: Primary applicants and beneficial owners generally must be 18 or older. Minors usually need a parent or guardian to co-sign, which can prolong the process.

• Identity verification: If the bank cannot easily verify the identities of the beneficial owners or the person in control, it might delay approval or reject the application

• Financial and credit background: Some banks review personal credit histories and check for disqualifying factors such as bankruptcies and court orders related to outstanding debts

How do you choose a startup bank account that fits your stage?

The right account depends on what your company needs to do in the next 12 months. If you switch banks later, you might need to update payroll, relink vendor payments, and send new account details to customers and investors.

At incorporation, you'll need an account that opens fast and can receive a founder's capital contribution or an investor's electronic transfer. It's worth checking how the bank handles incoming transfers before you apply since an account that can't receive funds the day your round closes creates unnecessary problems.

Once customers start paying, you'll have to decide how you'll receive money. If you accept payments through a payment provider like Stripe, payouts will land in your bank account. It's important to confirm the account works with your provider and how quickly funds become available.

What are some startup bank account best practices?

As you hire employees and spend, you can benefit from implementing a few common practices:

• Cards with spend controls: Per-employee limits and category restrictions are better than passing around one company card

• Subaccounts: Separate operating cash from payroll reserves or a lease deposit

• Role-based access: Allow a finance hire to see transactions without the authority to move money

• Accounting and payroll integrations: As volume grows, reconcile automatically rather than manually

• Vendor payments: Pay invoices from one place, and add approvals before money leaves

How Stripe Treasury can help

Stripe Treasury brings payments and finances together on Stripe, so businesses can receive, store, send, and spend funds in one place. It's built for startups and growing businesses that want to move money faster and spend less time managing financial operations. Platforms, marketplaces, and fintechs can also offer financial services to their users with Treasury for platforms.

Treasury can help you:

• Simplify your financial operations: Manage money, payments, card spend, payouts, and more from the Stripe Dashboard.

• Move money faster: Access settled Stripe earnings right away and send instant transfers to other businesses on Stripe without cost.

• Get more from your money: Earn cashback on card spend and Stripe fee credits on qualifying balances.

• Operate globally with ease: Hold balances in multiple currencies, convert only when needed, and send payouts to recipients in 160+ countries.

• Automate financial operations: Use agents to analyse cash flow and automate tasks such as paying invoices, moving money, and converting currencies within limits you set.

Learn more about how Stripe Treasury can help you manage your finances and payments in one place, or get started today.

Stripe Treasury includes various distinct Stripe products. See applicable product terms. Stripe is not a bank. Checking accounts are provided exclusively by Fifth Third Bank, National Association, Member FDIC. Deposits are insured through Fifth Third Bank.

FAQs about opening a startup bank account