One of the most common pieces of advice freelancers receive is to separate personal and business finances. It sounds simple. But when you try to actually open a business bank account, you quickly discover that most traditional banks were not built with solo freelancers in mind.
They ask for an LLC. They require a minimum balance. They charge monthly fees that eat into your income before you even get started. This guide breaks down exactly how to open a business bank account as a freelancer — without forming a company, without a minimum deposit, and without paying fees you do not need to pay.
Why Freelancers Need a Separate Bank Account
Before getting into the how, it is worth being clear about the why. Mixing personal and business money is one of the most common financial mistakes freelancers make, and it creates problems that compound over time.
When everything runs through one account, you cannot easily see how much your freelance work actually earns. You cannot quickly calculate how much to set aside for taxes. You cannot give a clean picture of your business income to a bank, a client, or an accountant. And if you ever get audited, having a single account makes the process significantly more stressful.
A dedicated business account solves all of this. Every payment in, every business expense out — all in one place, completely separate from your personal spending.
Do You Need an LLC to Open a Business Bank Account
No. Many freelancers assume you need a registered business entity to open a business bank account, but that is not true. You can open a business bank account as a sole proprietor — which is the default legal structure for any freelancer who has not formally incorporated.
As a sole proprietor, your business and your personal identity are legally the same. You do not need to file any paperwork to operate as one. Most banks and fintechs that serve freelancers accept sole proprietors with just a Social Security Number and basic personal identification.
Some banks may ask for a DBA (Doing Business As) registration if you want the account to be under a business name rather than your personal name. A DBA is a simple, inexpensive filing you can do at your county clerk’s office. But many freelancers simply open the account under their own name and that works perfectly well.
What You Typically Need to Open the Account
Requirements vary by institution, but most banks and fintechs ask for the following when opening a business account as a sole proprietor:
- Government-issued photo ID (driver’s license or passport)
- Social Security Number or Employer Identification Number (EIN)
- Personal address and contact information
- Brief description of your business activity
- Initial deposit (varies — many fintechs require zero)
If you operate under a business name, some institutions will also ask for your DBA certificate. If you have an EIN — which you can get for free from the IRS in minutes — that can sometimes speed up the process and gives your account a more professional appearance.
Best Bank Account Options for Freelancers With No LLC
The best options for freelancers today are not traditional banks. They are fintechs and online banks built specifically for small business owners and independent professionals. Here is a comparison of the most popular options.
| Bank | Monthly Fee | Minimum Balance | Accepts Sole Proprietors | Notable Feature |
|---|---|---|---|---|
| Mercury | $0 | None | Yes | Clean UI, strong integrations |
| Relay | $0 | None | Yes | Multiple sub-accounts for budgeting |
| Novo | $0 | None | Yes | Expense tracking built in |
| Found | $0 (basic) | None | Yes | Built-in tax tools for freelancers |
| Lili | $0 (basic) | None | Yes | Automatic tax savings bucket |
Mercury
Mercury is one of the most popular business banking options among freelancers and solopreneurs. It has no monthly fees, no minimum balance, and accepts sole proprietors. The interface is clean and well-designed, and it integrates easily with tools like QuickBooks, Stripe, and PayPal. Mercury also offers a free checking and savings account, making it easy to keep a tax reserve separate from your operating funds.
Relay
Relay is particularly useful for freelancers who want to organize their money into separate buckets — for example, one account for operating expenses, one for taxes, and one for savings. You can create up to 20 checking accounts and 50 virtual debit cards, all under one login. There are no fees and no minimum balance requirements.
Novo
Novo is designed specifically for small business owners and freelancers. It offers free checking with no minimum balance and includes built-in expense tracking and invoicing tools. Novo also has a “Reserves” feature that lets you set aside money for specific purposes — useful for setting aside tax payments throughout the year.
Found
Found goes beyond banking and positions itself as an all-in-one financial tool for self-employed workers. The free plan includes a business checking account with no fees, automatic expense categorization, and a tax savings tool that estimates what you owe based on your income. The paid plan adds more advanced tax features including Schedule C preparation.
Lili
Lili is another fintech built for freelancers. Its standout feature is the automatic tax bucket — every time a payment comes in, Lili can automatically move a percentage into a dedicated tax savings account. This removes the need to manually calculate and transfer tax money, which is one of the most common pain points for self-employed workers.
Should You Use a Traditional Bank Instead
Traditional banks like Chase, Bank of America, and Wells Fargo do offer business checking accounts, but they typically come with monthly maintenance fees ranging from $12 to $30 unless you maintain a minimum balance — which can be anywhere from $1,500 to $5,000 depending on the account.
For a freelancer just starting out or managing irregular income, tying up $1,500 to $5,000 just to avoid a fee is not practical. Traditional banks make more sense once your business has consistent cash flow and you need services like business loans, merchant services, or in-person banking.
For most freelancers, one of the fintech options listed above is the smarter starting point.
How to Actually Open the Account: Step by Step
The process is straightforward with most of the fintech options above. Here is what the typical application looks like:
- Go to the bank’s website or download their app
- Click “Open an account” and select sole proprietor or self-employed as your business type
- Enter your personal information: name, address, date of birth, SSN
- Describe your business activity in one or two sentences (e.g., “freelance graphic design” or “independent writing and content creation”)
- Upload a photo of your ID when prompted
- Submit the application — most fintechs approve within minutes to 24 hours
- Fund the account if a deposit is required (many require nothing to start)
Once approved, you will receive a debit card in the mail within a few business days. You can usually start using the account number and routing number immediately for incoming payments.
Tips for Using Your Business Account Effectively
Opening the account is just the first step. To get real value from it, follow these habits from day one:
- Route all client payments here. Update your invoices, PayPal, Stripe, Wise, or any other payment platform to deposit into your business account.
- Pay all business expenses from this account. Software subscriptions, equipment, professional services — everything business-related comes out of this account, not your personal one.
- Transfer your personal salary on a schedule. Decide on a fixed amount or percentage to transfer to your personal account each week or month. This simulates a salary and keeps your business balance separate.
- Set aside taxes automatically. As soon as a client payment arrives, move 25 to 30 percent into a dedicated savings account for taxes. Do not wait until quarterly estimated tax time to figure it out.
- Review transactions weekly. A five-minute weekly review is enough to catch errors, categorize expenses, and stay on top of your cash flow.
What About Getting Paid in Your Business Account Name
If you operate under your own name, this is not an issue — clients pay you directly and the funds go straight into your account. If you use a business name, you may want a DBA so that checks or transfers made out to your business name can be deposited without any problems.
Most payments from clients today are digital — bank transfers, PayPal, Stripe, Wise — so the name on checks matters less than it used to. But if you regularly receive checks, a DBA is worth the small cost and effort.
Frequently Asked Questions
Can I use my personal bank account for freelance work?
Technically yes, but it creates problems at tax time and makes it harder to track your business finances. A separate account is not legally required for sole proprietors, but it is strongly recommended from a practical standpoint.
Does opening a business bank account affect my credit score?
Opening a basic business checking account typically does not trigger a hard credit inquiry and will not affect your personal credit score. Some banks may do a soft pull to verify your identity, but this does not impact your score.
Do I need an EIN or can I use my SSN?
As a sole proprietor, you can use either. An EIN is free to obtain from the IRS and adds a layer of privacy since you are not sharing your SSN with every institution you work with. It is a good habit to get one even if it is not strictly required.
Can I open more than one business account?
Yes, and many freelancers benefit from having two — one for day-to-day operating funds and one for tax savings. Some use a third for a business emergency fund. There is no rule against having multiple accounts across different institutions.
What happens if I later form an LLC?
If you eventually form an LLC, you will need to open a new business account in the LLC’s name with its EIN. Your sole proprietor account cannot simply be converted. Plan ahead for this transition so you can update your payment platforms and invoices smoothly.
Conclusion
Getting a business bank account as a freelancer with no LLC is simpler than most people think. You do not need a registered company, a minimum balance, or a visit to a branch. With options like Mercury, Relay, Novo, Found, and Lili, you can have a fully functional business account up and running in under an hour — for free.
The sooner you make this separation, the easier your finances become — at tax time, when tracking your income, and when your freelance business starts to grow. Open the account today and make it a habit to route everything through it from day one.
