Can You Have Multiple Business Bank Accounts?

There’s no limit on the number of business bank accounts you can have. Managing multiple accounts may be complex, but the trade-offs are usually worth it.

There are a few reasons to use several business bank accounts:

• To set money aside for a specific purpose. Some businesses use a separate account or sub-account for their payroll or quarterly taxes, for instance.

• To save for medium-term goals. Business savings accounts can pay more than 3% APY on your balance. Most checking accounts pay little interest if any.

• To hedge against account freezes or bank failures. You hopefully never experience either. But if you do, having a separate account means you still have cash to use.

Here’s what to consider if you want to have two or more business bank accounts.

» MORE: Best business checking accounts

Should you open multiple business bank accounts?

Each business account you open should serve a distinct purpose. That’s especially true if you have to keep track of multiple financial institutions’ account requirements and fees.

Open several accounts if:

You want to separate certain expenses

Say you want to better track incoming client payments, or always ensure you have enough cash to make payroll. You could have a dedicated business checking account for each.

Sub-accounts can be an easy way to do this. These are technically separate accounts, but you manage them from the same dashboard. These fintech companies support sub-accounts:

• Bluevine.

• Relay.

• North One.

• Mercury.

Businesses that pay quarterly estimated taxes may also benefit from having one or more checking accounts. It can help you set money aside for those tax payments. Found is an online business account that automatically sets money aside for taxes and helps you track write-offs.

You want to earn interest

Interest rates are falling nationwide. But you can still earn a solid return on a business savings or money market account. Axos Bank, for instance, offers a free high-yield account that earns 3.8% APY.

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.

A business certificate of deposit might be a good option to save for goals that are a few years down the road. Business CDs earn higher rates — you can earn more than 4.00% in some cases. But they lock your money up until the CD hits its maturity date, typically anywhere from six months to five years.

You want to protect your assets

Deposits at an FDIC-insured bank are protected in the event of a bank failure. You’re covered for up to $250,000 per deposit, per institution and per ownership category. But that amount isn't sufficient for all small businesses. Having accounts across multiple business banks can shield your business from major disruptions if one of your banks fails.

Keeping funds at different banks can also protect your operations if your account is frozen due to suspected fraud or disrupted for any other reason. One easy way to set that up: Keep your operating and savings accounts at different banks.

How many business bank accounts should you have?

Every business should have at least a business checking account. That makes it easier for you to pay bills and get paid. It also helps establish your business and provides a solid foundation for the rest of your banking needs. Here’s what you need to open your first business account.

Beyond that, the right number of accounts will depend on your business. Here are some general tips, though these aren’t hard-and-fast rules.

• If you have minimal overhead: You can probably get by with one business checking account. An option that sets funds aside for tax planning, like Found, could be useful. You can use that account for revenue and any expenses you have, then transfer money to your personal account when it’s time to pay yourself.

• If you often take — and make — payments: Set up two business checking accounts at two different banks. That way, if one account ever gets frozen, you’ll still have access to some money while you resolve the issue.

• If you have employees: Strongly consider a dedicated checking account for payroll. This isn’t strictly necessary, but it can help ensure you always have enough cash on hand to pay employees. Set up automatic transfers from your main, operational account to cover these expenses. 

• If you have a lot of cash reserves: Get a business savings account or money market account. Similar to personal savings accounts, these pay higher APYs than checking accounts but limit how many transactions you can make. They’re great places to stash your rainy-day fund or the cash you’re setting aside for a big investment.   

• If you have a lot of cash, period: You shouldn’t keep more than $250,000 in any one account. That’s the maximum FDIC insurance will cover. If your bank were to fail, the FDIC might not make you completely whole. One exception: Some accounts offer Insured Cash Sweep programs. These can increase your FDIC insurance coverage, sometimes to millions of dollars.

Can you use one bank account for two businesses?

Technically, yes. But we don’t recommend it. Each business should have its own bank account.

Keeping each business’s finances separate will make closing your books and doing your taxes much easier. It also lets you see what cash flow looks like for each individual business.

Opening a second business account should be free and relatively simple. Some online business accounts, including Lili and Relay, let users manage accounts for several businesses using the same login information.

» MORE: NerdWallet’s best free business checking accounts

How to manage two or more business bank accounts

The more complexity you add to your business finances, the harder they can be to manage. Here’s how to stay on top of several accounts: