Choosing your startup's first business bank account

A bank that works well for a funded U.S. software company may be a poor fit for a solo founder living abroad. Write down the legal entity, owners' countries of residence, operating address, expected customers, and payment needs. Use the same facts when comparing providers. A recommendation without that context is hard to apply.

For a small software business, the first questions are ordinary ones: can customers pay you, can you pay contractors and taxes, can two founders have appropriate access, and can your accountant export the records? Branch access, cash deposits, foreign currency, or borrowing may add requirements. Do not pay for a complicated setup before you know which of those you need.

Banks commonly request company formation documents, tax identification information, ownership details, and personal identification. The exact list varies. Ask what they need for your entity and owners, including the address evidence they accept. A registered agent's address and the place your business operates are different facts.

Check that the legal name, formation date, EIN record, and ownership information agree across the packet. If a founder changed address or the share ownership changed, resolve the discrepancy instead of uploading whichever old document is easiest to find. Never invent an address or tax identifier to make an application proceed.

• SBA: launching a business and opening a bank account
• EINs for international founders

Look past the app's brand name. Is the provider an insured bank, or a financial technology company arranging accounts with partner banks? Read the account agreement and identify the actual deposit institution. FDIC insurance protects eligible deposits if an insured bank fails; it is not a general guarantee against every account-access problem or a nonbank provider's failure.

For qualifying corporation, partnership, and unincorporated-association accounts, the standard FDIC limit is generally $250,000 per depositor, per insured bank, in the applicable ownership category. Multiple accounts at the same bank do not automatically multiply coverage. Sweep programs and pass-through arrangements have conditions. Check your specific arrangement rather than adding up marketing claims.

• FDIC: business-account insurance coverage
• FDIC: bank arrangements with third parties

List your expected incoming payments, outgoing transfers, currencies, and average balance. Compare monthly charges, minimums, wire and transfer fees, card access, and accounting exports. Then ask how you reach a person if a payment is delayed or the account needs another review. A low monthly fee has limited value if the account cannot support your actual transactions.

Once approved, test a small incoming payment and a small outgoing payment before directing all customer revenue there. Give each person their own access and the permissions they need. Keep company spending distinguishable from personal spending, reconcile regularly, and save statements outside the provider's dashboard.

• Confirm eligibility for the entity, owners, industry, and locations.
• Get the required documents and accepted address evidence.
• Read the account agreement, deposit arrangements, and fees.
• Test transfers and accounting exports.
• Record who can initiate and approve payments.