Can You Have Multiple Business Bank Accounts?

Setting up a business checking account is one of the first things to do when starting a business. But it might make sense to have multiple business bank accounts depending on your business’s finances and goals.

You can open as many business bank accounts as you want, as long as you meet account requirements and your application is approved. Here’s what to consider if you want to have two or more business bank accounts.

When to open multiple business bank accounts

Each business account you open should serve a distinct purpose, especially if opening it means keeping track of multiple financial institutions’ account requirements and fees.

You want to separate certain expenses

Say you want to better track payroll and incoming client payments — you could have a dedicated business checking account for each.

Businesses that pay quarterly estimated taxes may also benefit from having one or more checking accounts, as they can put the money necessary for those tax payments into a separate account. Or you can also opt for an account that automatically sets money aside for taxes and helps you track write-offs, like Found Small-Business Banking or the Lili Business Checking account.

You want to earn interest

If your business has healthy cash reserves, earn interest on your funds by stashing them in a business savings account.

As of this writing, the national average for interest rates on savings accounts is 0.24%, compared with just 0.04% on checking accounts, according to the FDIC. Some of our picks for best business savings accounts earn 2.50% or higher

You can also consider a business money market or certificate of deposit, which earn slightly higher rates. Keep in mind: Business CDs lock in your rate for a set term, so you could miss out on further rate increases. And you can't access money in a CD until its maturity date, typically anywhere from one to five years.

You want to save for different goals

Opening more than one savings account could make sense to set aside cash for distinct purposes. For example, putting money aside for a short-term goal like upgrading equipment versus a long-term need like saving for an emergency.

Some business banking providers — Novo, for instance — build in tools that help you earmark funds for different goals so you don’t need to open and manage multiple accounts.

What to watch for with multiple business bank accounts

Juggling several business bank accounts can not only make bookkeeping more challenging. Managing the accounts themselves can be tricky, too. If you opt for multiple business checking accounts, for example, you’ll have to know details like the minimum balance and transaction limit for each to avoid unnecessary fees.

Shop around to compare features across different types of accounts, like checking and savings, too. Business savings accounts typically limit withdrawals and transfers to six per month, which won’t work for all businesses. But you can earn a high APY and make unlimited withdrawals with an interest-bearing checking account like Bluevine Business Checking, which earns 2.00%% APY.

How to set up multiple business bank accounts

Every business has unique financial needs, but there are a few essential steps to take if you want multiple business bank accounts:

• Register for an employer identification number from the IRS. EINs are free to file for, and the majority of financial institutions ask for your EIN when you apply for an account. You’ll likely need additional documentation as well, such as a government-issued photo ID, to open a business bank account.

• Apply for a business checking account. This should be the first business account you get, for practical reasons: A business checking account makes it easier for you to pay bills, manage payroll and get paid by clients. It also helps establish your business and provides a solid foundation for the rest of your banking needs.

• Decide what other accounts your business needs. If you want to open a second checking account, you can do so as long as you meet the provider’s qualifications. If you have cash reserves you can set aside, a business savings account can help put your money to work by accruing interest. Live Oak Business Savings accounts, for example, offer online-based savings that earn 4.00%% APY with a balance as low as 1 cent.

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