EIN and Business Bank Accounts:
What Sole Props and LLCs Actually Need
Getting an EIN is free and takes 10 minutes. Opening a business bank account is essential for LLCs. Here is exactly what you need for each structure.
Employer Identification Number (EIN)
Sole Proprietor: EIN Optional
By default, sole proprietors use their Social Security Number for all tax purposes. You do not need an EIN unless:
- + You hire employees (EIN required)
- + You open a solo 401(k) retirement account
- + You want to avoid giving vendors/banks your SSN
- + You plan to elect S-Corp status later
LLC: EIN Strongly Recommended
Single-member LLCs technically do not require an EIN unless they have employees or elect S-Corp, but you almost always want one because:
- + Banks require it to open a business account
- + Protects your SSN from vendors and contractors
- + Needed if you ever hire or elect S-Corp
- + Establishes the LLC as a separate financial identity
How to Get an EIN: Free in 10 Minutes
- 1Go to IRS.gov and search 'EIN online application'
- 2Select the correct entity type (sole proprietor or LLC)
- 3Enter your legal name, SSN, business name, and address
- 4Answer a few questions about your business
- 5Receive your EIN immediately on screen and by email
Warning: Many websites charge $50-$100 to "help you get an EIN." This is unnecessary. The IRS application is free and straightforward. Only use IRS.gov directly.
Business Bank Accounts
Sole Proprietor: Optional but Recommended
You are not legally required to have a separate bank account as a sole proprietor. Many people run sole prop businesses using a personal account. However, a separate account makes bookkeeping cleaner, simplifies Schedule C preparation, and looks more professional to clients.
LLC: Separate Account is Essential
Commingling personal and business funds is the single most common cause of courts piercing the LLC's corporate veil. If you use one account for everything, you may lose your liability protection in a lawsuit. Open a dedicated LLC account immediately after formation.
Best Business Banks (No Monthly Fee Options)
| Bank | Monthly Fee | Min Deposit | Best For |
|---|---|---|---|
| Relay | $0 | $0 | LLC owners who want automated savings and multiple sub-accounts |
| Mercury | $0 | $0 | Tech-savvy founders; integrates with accounting software |
| Novo | $0 | $50 | Freelancers and small businesses; fast setup |
| Bluevine | $0 | $0 | Business checking with interest (up to 2% APY) |
| Chase Business Complete | $15 (waivable) | $0 | Owners who need physical branch access |
| Bank of America | $16 (waivable) | $100 | Traditional banking with business credit card options |
Rates and features as of April 2026. Always verify current terms directly with the bank before opening.
What Banks Ask For (LLC Account)
EIN from IRS
Required
Articles of Organization (state-filed LLC formation document)
Required
Operating Agreement
Required by some banks, optional at others
Sometimes required
Government-issued personal ID
Required
Business address
Required
Initial deposit
$0 at online banks; $50-$100 at some traditional banks
Sometimes required
First-Week Setup Checklist
Get an EIN from IRS.gov (free, 10 minutes)
Open a dedicated business bank account using your EIN and Articles of Organization
Move any existing business income or expenses out of your personal account
Set up accounting software or a spreadsheet to track income and expenses
Configure all business payments to go to your business account
Order business checks or a debit card in the LLC name
Set up quarterly estimated tax reminders (April 15, June 15, September 15, January 15)