Can you open a business bank account with a DBA?

It is possible to open a business bank account with a DBA, and this offers many benefits which will be expounded upon below. The process is fairly simple and doesn’t require too many documents that are difficult to come by. 

According to the U.S. Small Business Association, there are many benefits to opening a business bank account, and you should open one the moment that you begin receiving or spending money as your business. 

The usual business bank accounts are checking accounts, savings accounts, credit card accounts, and merchant services accounts. The merchant services account gives you the ability to receive credit and debit card transactions from customers. 

What is a DBA?

DBA means “doing business as” and is also recognised as a trade name, fictitious name, or an assumed name. It gives a business permission to operate under a name that is different to the legal business name. It’s important to remember that a DBA isn’t a business structure, and at its core does not offer the personal asset protection that an LLC or a corporation does.

Why open a business bank account?

Business bank accounts offer benefits that standard personal bank accounts simply do not provide. These include:

1.   Protection.

Business banking has the advantage of providing limited personal liability protection as it separates your business funds from your personal funds. Merchant services have the added advantage of offering purchase protection for your customers and safeguards their personal information. 

2.   Professionalism. 

Customers have the ability to pay by credit card and make checks out to your business rather than directly to you. Furthermore, you’ll have the capacity to authorize employees to take care of day-to-day banking responsibilities on behalf of the business. 

3.   Preparedness.

Typically, business banking provides the opportunity for a line of credit for the company. This has the potential to be utilized in the event of an emergency, or should your business require new equipment. 

4.   Purchasing Power. 

Credit card accounts aid your business in making large startup purchases and assists in instituting a credit history for your business. 

How do I open a business bank account with a DBA?

You can only open a business bank account once you’ve acquired your federal Employer Identification Number (EIN) which can be applied for online, by fax, or by mail through the Internal Revenue Service (IRS). This service is free. 

The process of opening a business bank account is fairly easy once you’ve decided on which bank you’ll be working with. You can go online or visit a local branch to start the procedure. Although banks may have different document requirements, and some may require more than others, these are the most common: an Employer Identification Number (EIN) (or a Social Security Number, should you be a sole proprietorship, your business’s formation document, ownership agreements, and a your business license depending on the state where your business will be operating and on the nature of your business.

What should I look for in a business bank account?

Many business owners prefer opening a business account at the same bank that they use for their personal accounts. However, rates, fees, and options differ from bank to bank so it’s a good idea to explore all of your options to find a bank that offers the lowest fees and the best benefits. Some things to consider are:

1.     Introductory offers

2.     Interest rates for savings and checking

3.     Interest rates for lines of credit

4.     Transaction fees 

5.     Early termination fees

6.     Minimum balance fees 

Should you be thinking of opening a merchant service account, take the following into consideration: 

1.     Discount rate 

2.     Transaction fees

3.     Address Verification Service (AVS) fees

4.     ACH daily batch fess

5.     Monthly minimum fees

More information:

For more insights into the procedure for applying for a DBA, the benefits thereof, and how to start the process, read more here.