Minnesota Banking Practical Guide: Opening a Business Checkin

Minnesota Banking Practical Guide: Opening a Business Checking Account for Students

Opening a business checking account can be an essential step for students looking to manage their finances effectively while running a small business or freelance venture. This guide provides a practical, step-by-step approach tailored to students in Minnesota.

Quick Summary

This guide outlines the necessary eligibility criteria, required documentation, and the step-by-step process for opening a business checking account in Minnesota. It also discusses typical fees, alternative options such as digital banks, and frequently asked questions to help students navigate the banking landscape.

Eligibility & Requirements

Before proceeding with the account opening process, it is essential to understand the eligibility criteria and requirements:

Eligibility Criteria

1. Age: Most banks require account holders to be at least 18 years old. However, students under 18 may require a co-signer, typically a parent or guardian.
2. Business Type: The business must be legally registered, which can include sole proprietorships, partnerships, or LLCs. Some banks may accept informal business structures for students.
3. Identification: A government-issued ID is typically necessary.

Required Documentation

Students will need to provide the following documents:

- Identification: A valid driver's license, state ID, or passport.
- Social Security Number (SSN) or Employer Identification Number (EIN): Depending on the business structure.
- Business Documentation: This may include a business license, registration documents, or a fictitious name certificate (DBA).
- Proof of Address: A utility bill, lease agreement, or bank statement with the student’s name and address.
- Initial Deposit: Most banks require an initial deposit to open the account, which can vary by institution.

Step-by-Step Opening Process

The process of opening a business checking account can be straightforward if you follow these steps:

Step 1: Research Banks

Begin by researching local banks and credit unions in Minnesota. Consider factors such as fees, services offered, online banking features, and customer reviews.

Step 2: Gather Required Documents

Collect the necessary documentation outlined above. Ensure that all documents are current and accurate.

Step 3: Visit the Bank or Apply Online

Depending on the bank's policy, you can either visit a local branch or apply online. If applying in person, it may be beneficial to schedule an appointment.

Step 4: Complete the Application

Fill out the application form, providing all required information accurately. Be prepared to discuss your business and its financial needs with the bank representative.

Step 5: Initial Deposit

Make the required initial deposit. This amount can vary by institution, so confirm the specific requirement with the bank.

Step 6: Review Terms and Conditions

Carefully review the terms and conditions associated with the account. Pay attention to any fees, withdrawal limits, and transaction limits.

Step 7: Receive Account Details

Once the application is approved, you will receive your account number and other relevant details. You may also receive checks and a debit card.

Step 8: Set Up Online Banking

If available, register for online banking to manage your account easily. This can provide access to features such as mobile deposits, fund transfers, and transaction tracking.

Typical Fees & Timelines

When opening a business checking account, be aware of the following typical fees and timelines:

Fees

- Monthly Maintenance Fees: These can range from $5 to $25, depending on the bank and account type. Some banks may waive these fees if certain conditions are met, such as maintaining a minimum balance.
- Transaction Fees: Fees for transactions beyond a certain limit may range from $0.15 to $0.50 per transaction.
- Overdraft Fees: Fees for overdrafts can vary widely, typically between $20 and $40.
- ATM Fees: Using out-of-network ATMs may incur fees ranging from $1.50 to $3.

It is essential to verify these fees with the bank directly, as they can change and may vary by account type.

Timelines

The account opening process can typically take anywhere from a few hours to a few days, depending on the bank's procedures and whether you apply online or in person.

Alternatives & Digital Banks

For students who prefer a more flexible banking experience, digital banks offer a viable alternative. Some popular digital banking options include:

- Chime: Known for no monthly fees and easy online access.
- Axos Bank: Offers a range of business checking accounts with low fees.
- Lili: Specifically designed for freelancers and small business owners, providing expense tracking and tax savings features.

When choosing a digital bank, review their specific offerings, fees, and services to ensure they meet your business needs.

FAQs

1. Can I open a business checking account if I am a minor?Yes, but you may need a parent or guardian to co-sign the account.

2. What types of businesses can open a business checking account?Sole proprietorships, partnerships, LLCs, and even informal business structures may qualify, depending on the bank.

3. Are there any fees associated with business checking accounts?Yes, typical fees include monthly maintenance fees, transaction fees, and overdraft fees. Verify with your bank for specifics.

4. How much money do I need to deposit to open an account?Initial deposit requirements can vary widely, generally ranging from $25 to $100.

5. Can I manage my account online?Most banks offer online banking services, allowing you to manage your account, make transfers, and track transactions.

6. What if I have a question after opening the account?You can contact your bank's customer service for assistance with any questions or concerns.

7. Can I switch banks later if I am not satisfied?Yes, you can close your account and open another with a different bank if you find a better option.

8. Do I need an EIN to open a business checking account?An EIN is typically required for partnerships and LLCs, but sole proprietors may use their SSN.

Disclaimer

For informational purposes only; not financial/tax/legal advice.

About the Author

Marks Toms – Editor-in-Chief
Marks oversees editorial policy, compliance, and fact-checking at bankaccountsopen. Read more articles