Opening a Business Bank Account

Quick answer

A business bank account keeps your business money apart from your personal money. That makes bookkeeping faster, supports the records the CRA expects you to keep, and gives you a clearer view of cash flow. A corporation is a separate legal entity, so its money belongs in an account in its own name. Sole proprietors should check their bank’s rules: some banks require a business account for business activity even when you operate under your own name.

Figures in this guide apply to 2026 and were checked against official pages in September 2026.

Key takeaways

Separating business and personal money makes your records easier to keep and easier to support if the CRA asks questions.
Banks typically ask for personal ID plus proof of your business, such as a business name registration or articles of incorporation.
Compare accounts on how you will actually use them: monthly fee, included transactions, deposits, e-transfers and accounting software connections.
GST/HST you collect is not your money. Consider setting it aside as it comes in.
Connect the account to your bookkeeping and reconcile it every month.

Why keep business and personal money separate?

The CRA says you are required by law to keep records of all your transactions to support your income and expense claims. It lists bank statements, deposit slips and cancelled cheques among the documents that support those records. You generally keep them for six years from the end of the last tax year they relate to.

When business and personal spending share one account, every statement line needs sorting. Groceries sit next to supplier payments. Customer deposits sit next to a transfer from a family member. A dedicated account turns your statement into a clean record of business activity and shows whether the business is generating cash on its own.

Corporations

The CRA describes a corporation as a separate legal entity that can enter into contracts and own property in its own name, separately from its owners. The corporation’s money is not the owner’s money. It should flow through an account in the corporation’s name, and payments to you should be recorded properly, for example as salary, dividends or a shareholder loan.

Sole proprietors

The CRA record-keeping pages reviewed for this guide require complete records, but do not say a sole proprietor must have a separate bank account. Bank policies are another matter. RBC, for example, states that it requires even sole proprietors operating under their own name to have a business account. Ask your bank what applies to you. Even where it is optional, a separate account is usually the simplest way to keep clean records.

What banks typically ask for

Requirements vary by bank and business structure. Based on published lists from major Canadian banks, expect some combination of the following.

Business type	Documents typically requested
Sole proprietor using a registered business name	Government-issued photo ID; the business name registration (in Ontario, the Business Name Registration, formerly called the Master Business Licence)
Sole proprietor using their own name	Government-issued photo ID; personal details such as address and date of birth. Ask the bank what else it needs.
Corporation	ID for directors or officers; articles of incorporation; for established corporations, a supporting document such as a corporate profile report, a certificate of status or the Business Number; details of people who own 25% or more

Banks may also ask for your social insurance number. In Ontario, registering a business through the Ontario Business Registry also gets you a federal Business Number, which is useful to have on hand. If you have not registered yet, see our guide to starting a business in Canada.

How to compare business accounts

The Financial Consumer Agency of Canada advises reading all the terms and conditions of an account, including fees, before you sign up. For a business account, focus on these points:

Fee structure. A flat monthly fee, a lower fee plus per-transaction charges, or a minimum balance to waive the fee.
Transaction limits. How many debits and credits are included, and what each extra one costs.
Deposits and e-transfers. How customers pay you, whether you deposit cash or cheques, and how many e-transfers you send and receive.
Accounting software connection. Whether your software can import transactions from the bank automatically.
Deposit insurance. CDIC insures eligible deposits, such as chequing and savings accounts and GICs, up to $100,000 per insured category at each member institution. Coverage is automatic. Check that your bank is a CDIC member. Provincially regulated credit unions are covered by provincial deposit insurance plans instead. If your balances may be large, ask how coverage applies to business deposits.

Before comparing, estimate your monthly activity. The Business Budget Calculator can help you map out expected income and expenses, which drives how many transactions you will run.

Example: choosing between two fee structures

Example

Priya is starting a sole proprietorship in Ontario, doing freelance design under a registered business name. She is choosing between two accounts. The fees below are hypothetical and do not represent any real bank’s pricing.

Account A: $20 per month, 50 transactions included, $1.25 for each extra transaction.
Account B: $6 per month, 10 transactions included, $1.25 for each extra transaction.

Transactions per month	Account A	Account B
15	$20.00	$6 + (5 × $1.25) = $12.25
40	$20.00	$6 + (30 × $1.25) = $43.50

At about 22 transactions a month, Account B starts costing more than Account A. Priya expects around 15 transactions in her first year, so Account B is cheaper for now. She plans to review the choice once her client list grows.

Keeping GST/HST money aside

If you are registered for GST/HST, the CRA treats the GST/HST you collect from customers as deemed trust amounts. It is money you hold for the government until you remit it.

A practical habit is to move the tax portion of each deposit into a separate business savings account. For example, if Priya invoices an Ontario client $1,000 plus 13% HST, she receives $1,130 and moves $130 aside. When her return is due, the money is there. Our guide to how GST/HST works for small businesses explains registration, input tax credits and filing.

Connecting the account to your bookkeeping

Most accounting software can connect to your bank. QuickBooks Online, for example, says that once an account is connected it imports transactions daily, and you can upload transactions manually if your bank cannot connect. A bank feed saves typing, but it does not replace review. Each imported line still needs the right category and, where relevant, a matching receipt or invoice.

Reconcile the account every month. Compare your books to the bank statement and investigate any difference. Our month-end close guide walks through the steps. Once the numbers are reconciled, use them to plan ahead with the cash flow tools listed below.

Common mistakes

Paying personal expenses from the business account, or business expenses personally, without recording them.
Choosing an account on the monthly fee alone without estimating transaction volume.
Treating collected GST/HST as spending money.
Running a corporation’s income through the owner’s personal account.
Relying on the bank feed without monthly reconciliation.
Throwing away bank statements before the six-year record retention period ends.

Frequently asked questions

Can I use a personal account for my business?

A corporation should use an account in its own name, because it is a separate legal entity. For a sole proprietor, it depends on your bank’s terms. Some banks require a business account for business activity. Either way, a dedicated account makes your records much easier to keep.

Do I need a Business Number before opening an account?

Not always. Requirements vary by bank and business type. Corporations are typically asked for incorporation documents, and a Business Number is one of the supporting documents some banks accept. If you register your business in Ontario, you receive a Business Number as part of that process.

How many business accounts do I need?

Many small businesses start with one operating account. A second account for GST/HST and income tax savings can make it easier to avoid spending money that is already owed.

Project your cash position month by month with the Cash Flow Calculator.
Download the Monthly Cash Flow Checklist from our free small-business resources to make the monthly bank review a routine.

If you’d rather have help keeping your books, see Ronidex’s bookkeeping and accounting support.

Sources

This guide is general educational information, not personalized tax, legal or accounting advice. For decisions about your own situation, talk to a qualified professional.