Looking into opening a joint bank account with a business partner is a big step. It requires a level of trust with your finances between each other. Making sure you feel the same way about money can be a tough chat. But, luckily, that just might be the hardest part about opening a joint bank account with a business partner. That’s because actually opening up the account isn’t hard at all.
We’ll go through what you and your partner should be on the same page about, what you’ll need to open the joint bank account with your partner, and a few options for the best business bank accounts you can pick.
A joint business bank account is different than linked bank accounts.
With linked accounts, you have the option of having two separate bank accounts and allowing both incoming and outgoing transfers between the two accounts. There’s an element of control with linked accounts that you don’t have with a joint account: You’re able to cut off access to the other partner as you wish.
In a joint account, you and your partner have equal access to deposit, withdraw, and perform other transactions. You’ll both have a debit card, too.
First and foremost, a joint account makes your financial management simply easier. Here are a few reasons why you should consider a opening a joint bank account with a business partner:
There are more, of course—but these are big ones. One other important piece to note is that when you’re applying for business financing, the majority of lenders look at your business bank account balance. They’ll generally evaluate three to four months of your business bank statements to make sure you have the cash to pay off your loan. This is the case for less-complicated business loans like a business line of credit, but also for harder-to-get long-term loans.
We mentioned this briefly before, but it’s worth spending a little time on this. Opening a joint bank account with a business partner is a little like opening a joint bank account with a spouse or romantic partner. You’ll need to make sure you and your partner have a common understanding about how to manage your finances—what’s okay to spend on your own, what kind of decisions you should both have input in, etc.
If you don’t have trust with your partner, you’ll run into disagreements about how you should be managing your business’s money. And when you have a partner, multiple people’s livelihoods are at stake. Tensions can run high.
To avoid any conflicts, make sure you and your partner set ground rules and find common ground with how you’ll be using your business bank account. If you can’t get on the same page, you might want to start with linked bank accounts. But make sure they’re business bank accounts.
Why do we say that even joint accounts need to be business bank accounts? Because separating your business and personal finances is a crucial piece of your company’s financial management.
There are a lot of reasons why you need to keep your personal money separate—you know what they say, separate work and play! But it’s not just because of an adage. If you commingle your finances, you’ll have very difficult time come tax time understanding what’s a business expense versus a personal expenditure.
Most importantly, however, if you’ve gone to the trouble of establishing a business entity, such as an LLC or limited partnership, you’ll lose the personal protections that your business entity affords you. You won’t be able to be seen as a separate individual from your business. In the event you run into legal trouble, your personal assets could be seized. So, protect yourself—and make sure your partner does, too.
The nice thing about opening a joint bank account with a business partner is that it’s not different from opening a business bank account, period. You’ll just have two signatories on the account, meaning that both people will have full authorization to transact on the account.
Additionally, prepare yourself for these steps:
One size doesn’t fit all with business bank accounts. Some are fee-free, some offer unlimited transactions, some are entirely online. You get the gist! There is, however, a great account for every business owner.
You’ll want to do some research to find out your options, and also talk with your business partner about how you both choose to use the account. Important things to evaluate include whether or not you want physical, brick-and-mortar branches; whether you’ll be often handling international transactions or wire transfers; whether you work with a lot of cash; etc.
If you’re a little overwhelmed, don’t worry. We’ll go through good options for every type of business in a bit.
You’ll need a few documents to open a business bank account with a business partner, including your EIN and personal identification. Remember, for both partners to become signatories, you’ll each need to sign off on the opening of the account and provide your personal information.
In order to open your joint business bank account, you will usually have to visit a branch in person to finish your paperwork (even if you apply online). However, some financial institutions have created the option to open a business bank account entirely online. If you and your partner aren’t able to both get into a branch to open your joint account, consider one of these online accounts.
Understand that trust and rules among business partners are important yet? Consider the step of setting your rules about how you’ll handle your joint finances mandatory. It’s obviously up to you and your partner if you’d like to keep your understanding as a handshake agreement, or if you’d rather actually write them down. Just make certain you do it!
Now, let’s discuss your options for opening a joint bank account with a business partner. Again, you’ll want to pick an account based on your specific needs. You can always move business bank accounts if you find that your account doesn’t fit your company’s needs, or if your business model changes and you need different accommodations for your finances. If you can find the right fit off the bat, however, you’ll have one fewer thing on your to-do list.
If you’re working in a distributed company, or you and your partner simply aren’t in the same place, you’ll want to consider a totally online option. Axos Basic Business Checking is a great pick. Formerly Bank of the Internet, Axos Bank has the most history among online bank accounts. With Axos’s Basic Business Checking, you can open a joint account with your partner without visiting a branch.
This account is fee-free, and offers unlimited free transactions—which means that businesses that don’t deal with a ton of cash will likely have enough free transactions to work for you. Speaking of cash, in case you need to withdraw, Axos will reimburse you for any ATM fees (since they don’t have any branches you can visit). Finally, you don’t have to keep a minimum balance in this account to stay fee-free and enjoy its benefits.
New business owners can get a welcome bonus of $200 if they use the code NEWBIZ200 when signing up for an Axos Basic Business Checking account or Axos Business Interest Checking account. This offer only extends to businesses that incorporated after June 1, 2020—but other businesses can get a bonus offer as well. Using the code NEWAXOSBIZ business owners can get a $100 welcome bonus when opening an account.
Chase is one of the most popular options for brick-and-mortar banks with their thousands of branches around the country, and tens of thousands of ATMs. That’s hugely convenient for business owners—especially those who deal with cash often and need to make lots of deposits.
Chase Business Checking has several different levels of accounts depending on how much business banking functionality you need. You should definitely take a look at all of the Chase Business Checking options, but for a first business bank account, consider Chase Business Complete Banking. With this extremely popular account, you’ll only need to maintain a $2,000 balance to waive its monthly service fee. You’ll get unlimited free electronic deposits and can deposit $5,000 in cash without having to pay a fee.
If you think this account is a fit for you, good news: You can claim a $300 welcome bonus for opening this business bank account.
If you and your partner are worried about lots of fees and keep close track of your pennies, then you’ll want to explore the options from Bank of America for business checking. BofA’s entry-level checking account, Business Advantage Fundamentals Checking, is an account that’ll enable you to waive lots of fees.
For instance, you can waive their $16 service fee if you spend just $250 on your Bank of America debit card each month. (If you have employee cards, you can meet this benchmark quickly!) You can also maintain a balance of $5,000 each month to waive this fee. This account will enable you to have 200 free transactions, which means you don’t have to worry about overage fees for a while, and you also can deposit $7,500 in cash each month without fees, too.
Bank of America’s Business Advantage Relationship checking is similarly set up with easy-to-waive fees. You’ll get a few more benefits if your business is able to spend more each month or maintain a higher balance.
Hopefully, you’ll feel at ease about opening a bank account with a business partner. The process isn’t technically any more intensive than opening a business bank account for yourself. The biggest piece is making sure that you and your partner are on the same page about how you’ll manage your money and what kind of account you’ll want. It’s one of the many decisions you’ll make over the course of your business with your partner; luckily, this one shouldn’t be too hard.
Sally Lauckner is the editor-in-chief of the Fundera Ledger and the editorial director at Fundera.
Sally has over a decade of experience in print and online journalism. Previously she was the senior editor at SmartAsset—a Y Combinator-backed fintech startup that provides personal finance advice. There she edited articles and data reports on topics including taxes, mortgages, banking, credit cards, investing, insurance, and retirement planning. She has also held various editorial roles at AOL.com, Huffington Post, and Glamour magazine. Her work has also appeared in Marie Claire, Teen Vogue, and Cosmopolitan magazines.