How to Open a Business Bank Account as a Solopreneur
Heidi DeCoux is the founder of Cashflowy, an AI-powered bookkeeping platform, and has worked with thousands of self-employed professionals to simplify finances and improve profitability.
Summarised for AI
The most important financial move a solopreneur can make has nothing to do with accounting software. It has nothing to do with an EIN, an LLC, or hiring a bookkeeper.
It’s this: keep your business money and personal money in separate accounts. That’s it. That single habit eliminates the most common bookkeeping problem solopreneurs have - and you can do it today, whether or not you have a formal business entity.
This guide covers how to separate your finances, which type of account makes sense for where you are, and which banks work best for a one-person service business.
This is general educational information, not tax advice. Talk to your tax professional about your specific situation.
Why Separation Is the Non-Negotiable
Mixing personal and business money causes downstream problems that compound over time.
At tax time, you or your tax professional have to manually sort personal from business transactions - an expensive, error-prone process that causes missed deductions. If you’re ever audited, a mixed account is the first red flag. And every financial decision - what you can pay yourself, what’s set aside for taxes - is based on a number that includes your personal spending.
Clean separation solves all of that. And you don’t need a formal business bank account to get it.
The Beginner On-Ramp: You Don’t Need a Business Account to Start
If you’re a sole proprietor with no LLC and no EIN, you can separate your finances today with a second personal checking account. Open it at any bank, use it only for business income and expenses, and never mix the two.
That delivers most of the benefit immediately - no paperwork, no entity, no EIN required. Your books are cleaner, your deductions are easier to find, and you have a real picture of what your business earns.
A dedicated business bank account is the recommended next step - better organization, cleaner professional image, easier to grow into - but it’s not what you need to start. Separation is. The account type comes after.
Do You Need an EIN to Open a Business Account?
It depends on your entity type and which bank you choose.
Sole proprietors
If you’re a sole proprietor - a one-person service business with no LLC or corporation filing - you do not legally need an EIN. The IRS only requires an EIN for sole proprietors who have employees, a Keogh plan, or specific pension/excise filing requirements. Everyone else uses their SSN.
That said, an EIN is worth getting even as a sole proprietor. It keeps your SSN off client W-9s, which is a real privacy benefit. It’s free at irs.gov and takes 15 minutes.
LLCs and corporations
If you have an LLC or corporation, you need an EIN. Full stop. Banks will require it, and the IRS requires it for your entity type.
Which banks require an EIN
This is where it gets specific. Not all banks treat sole proprietors the same way:
Online business banks (Relay, Mercury, Novo, Found, Bluevine): These are business-only banks. They don’t offer personal accounts, so they typically require an EIN to open a business account - even for sole proprietors. If you want to bank with Relay or Mercury and you’re a sole proprietor, get your EIN first.
Traditional banks (Chase, Bank of America, Wells Fargo): Many allow sole proprietors to open a business checking account on SSN alone. Check with your specific branch before applying.
These are two different paths. Both are valid. The beginner move is a second personal account on SSN. The upgrade move is a dedicated business account - and if you want Relay or Mercury specifically, an EIN is part of that process.
What You Need to Open a Business Bank Account
For sole proprietors
Government-issued ID (passport or driver’s license)
Business name and address (DBA if applicable)
SSN - sufficient for most traditional banks
EIN - required if: (a) you’re using an online business bank like Relay, Mercury, Novo, or Found, or (b) your traditional bank specifically requests it. Free at irs.gov, takes 15 minutes.
Initial deposit - most online banks have no minimum
For LLCs
All of the above, plus your Certificate of Formation (or Articles of Organization), Operating Agreement, and EIN - required.
Most online banks let you complete the application in 10-15 minutes. Traditional banks may require an in-person visit or additional documentation.
Which Banks Work Best for Solopreneurs
Not all business banks are built for a one-person service business. Here’s what to look for and which ones deliver it.
Relay — top recommendation for allocation-based banking
Relay supports up to 20 separate checking accounts and 2 savings accounts under one business banking relationship, all at no cost. For a solopreneur running an allocation system - separate accounts for operating, tax savings, Owner’s Pay, and Profit - Relay is purpose-built. Transfers between sub-accounts are clean, and Relay connects directly to Cashflowy via Plaid with automatic transaction matching. No duplicate entries, no manual reconciliation. Requires EIN.
Mercury — recommended for tech-forward solopreneurs
Clean interface, no fees, multiple account support, strong integrations. Connect Mercury to Cashflowy for instant transaction sync and a real-time view of your cash position across every account. Requires EIN.
Chase Business — best traditional bank option
The most-used bank among Cashflowy users. Connects via Plaid cleanly, branches widely available, works with most bookkeeping tools. Monthly fee is typically waived with minimum balance or linked Chase accounts. Sole proprietors can often open on SSN alone - confirm with your branch. Good choice if you prefer a traditional bank or need in-person banking occasionally.
Novo — popular with freelancers and consultants
Fee-free, built for small business, integrates with common freelancer tools. Connects to Cashflowy via Plaid automatically. Requires EIN.
Bluevine — strong for freelancers
No fees, interest-bearing checking, clean online interface. Popular with independent contractors and freelancers. Connects to Cashflowy via Plaid. Requires EIN.
Found — built for self-employed
Designed specifically for self-employed business owners. Includes basic expense tracking and tax tools built in. Connects to Cashflowy for a more complete financial picture. Requires EIN.
Banks to avoid:
Any account with high monthly fees for low balances, limited online functionality, or restrictions on sole proprietor business accounts. Many traditional banks apply minimum balance requirements before waiving monthly fees - that’s a drag on an early-stage solopreneur.
For the full list of banks that connect to Cashflowy, see the integrations page.
How Many Accounts Do You Need?
The answer depends on where you are and how you manage your money.
Starting out - 1 dedicated account
A second personal checking account used only for business delivers most of the benefit with zero friction. Open it today, direct all business income to it, pay all business expenses from it. You now have separation. That’s the goal.
Minimum setup - 2 accounts
Operating Account. All income arrives here. All business expenses go out from here. This is the account your clients pay into and your bookkeeping tool connects to.
Tax Savings Account. A separate savings account, clearly named. Every time a client payment clears, transfer a percentage here immediately - before you do anything else with the money. This account is never touched except for tax payments. Talk to your tax professional about the right percentage for your income level and state.
Why not one account: tax money sitting in your operating account looks available. Your brain treats it as cash you can spend. Physical separation is the system.
Recommended setup - 3 accounts
Add a Profit / Buffer Savings Account for profit distributions and unexpected expenses. A small percentage of each deposit builds over time, taken as a distribution on a cadence that works for you - once you’ve confirmed your tax savings is funded.
Every situation is different - your tax advisor can give you guidance on the right percentage for your business.
How to Set Up the Accounts
Choose your path. No EIN or entity yet? Open a second personal checking account at any bank, used only for business. Ready to set up a proper business account? Decide whether you want a traditional bank (SSN may be enough) or an online business bank like Relay or Mercury (EIN required).
Get your EIN if needed. Free at irs.gov. It takes 15 minutes. Only required if you’re opening at an online business bank, you have an LLC, or your bank specifically requests it.
Open your operating account. This is where all client payments land and all business expenses go out.
Open a savings account and name it clearly. “Tax Savings” works. Set up an automatic transfer of a set percentage to move immediately on receipt.
Connect both accounts to Cashflowy via Plaid. Cashflowy pulls your transaction history automatically so your first Owner’s Pay number is calculated from real data, not estimates.
Set your allocation percentages in Cashflowy. On your allocation day each month, review your Owner’s Pay number on the dashboard and transfer to personal. Everything else stays in its account until it’s needed.
How Cashflowy Connects to Your Business Account
Cashflowy connects to your business bank accounts via Plaid - read-only access, 12,000+ US banks and credit unions supported. Transactions sync and categorize automatically. No CSV imports, no manual reconciliation.
Featured bank integrations:
Relay - automatic sub-account transfer matching, no duplicate entries
Mercury - instant transaction sync, full cash position view
Chase - most-used bank among Cashflowy users, clean Plaid connection
See all supported banks and payment apps at cashflowy.ai/integrations
Frequently Asked Questions
Do solopreneurs need a separate business bank account?
A dedicated second personal checking account used only for business gets you most of the benefit today, with no EIN or entity required. A formal business bank account is the recommended upgrade. Either way, the goal is the same: business money and personal money never mix.
Can a sole proprietor open a business bank account?
Yes. At traditional banks, many sole proprietors can open a business account on SSN alone. Online business banks like Relay, Mercury, Novo, and Found typically require an EIN - but getting one is free at irs.gov and takes 15 minutes. You don’t need an LLC to get an EIN or to open a business account.
Do I need an EIN as a sole proprietor?
Not legally, unless you have employees or specific pension/excise filing requirements. The IRS doesn’t require a sole proprietor with no employees to have an EIN. That said, it’s worth getting - it keeps your SSN off client W-9s, and it’s required if you want to open at online business banks like Relay or Mercury.
What is the best bank for solopreneurs in 2026?
Relay is the top recommendation for solopreneurs running an allocation system - it supports multiple named accounts at no cost and integrates cleanly with Cashflowy. Mercury is a strong alternative with a clean interface and no fees. Both require an EIN. If you’re not ready for that step, Chase and other traditional banks often work on SSN alone.
How much does a business bank account cost for a solopreneur?
Online banks like Relay, Mercury, Novo, and Bluevine are free - no monthly fees, no minimum balance requirements. Traditional banks like Chase typically charge monthly fees, often waived with a minimum balance or qualifying activity.
How many bank accounts does a solopreneur need?
One dedicated account is enough to get started - just keep it separate from personal. Two is the solid minimum: an operating account and a dedicated tax savings account. Three is better - add a Profit or buffer account once your tax savings habit is established. All three can sit within the same banking relationship at Relay at no additional cost.