To open a group bank account, decide which of three account types fits your group — a joint account for informal pooling, a business account tied to an LLC, corporation, or partnership, or an organizational account for a nonprofit or association — then bring identification for every signer plus the entity’s formation paperwork to the bank. That single structural choice controls who can pull money out, how interest is taxed, and whether a creditor of the group can reach your personal savings. Get it right before you fund the account.
Pick the Account Type First
Three structures cover almost every group.
- Joint checking fits informal groups: roommates splitting rent, a social club, family members sharing expenses. Any owner can deposit or withdraw the full balance without asking the others, and every owner shares liability for overdrafts and fees. Only human beings can be joint owners; a corporation or trust cannot.1Consumer Financial Protection Bureau. Joint Checking Account Owner Took All the Money Out
- Business checking is required for formal entities: LLCs, corporations, and partnerships. It legally separates the group’s money from each member’s personal finances.2U.S. Small Business Administration. Open a Business Bank Account
- Organizational accounts serve nonprofits, unincorporated associations, and trusts. Banks generally ask for proof of tax-exempt status, such as an IRS determination letter recognizing 501(c)(3) status, and apply tighter internal controls than they do to a standard business account.
Your choice sets your FDIC coverage, your tax reporting, and your personal exposure to the group’s debts. Those consequences are covered further down.
What to Bring to the Bank
The document list splits along the same line as the account choice.
For a Joint Account
Each co-owner needs a government-issued photo ID and a Social Security Number. The bank uses the primary account holder’s SSN for tax reporting, so agree in advance on who that will be.
For an Entity Account
Start with an Employer Identification Number. You can apply on the IRS website for free and receive it immediately.3Internal Revenue Service. Get an Employer Identification Number The EIN is the entity’s tax ID and keeps members’ personal SSNs off the account.
Then gather:
- Formation documents. Articles of incorporation for a corporation, articles of organization or operating agreement for an LLC, or a partnership agreement for a partnership.2U.S. Small Business Administration. Open a Business Bank Account
- A corporate resolution or meeting minutes naming the specific individuals authorized to open and manage the account. The bank cross-references this against your formation documents.
- Personal ID (driver’s license or passport) for every person who will have signature authority.
- A business license, if your jurisdiction requires one for the entity’s activities.
Nonprofits should also bring the IRS determination letter confirming tax-exempt status. If the original is lost, the IRS can issue an affirmation letter that serves the same purpose.4Internal Revenue Service. EO Operational Requirements – Obtaining Copies of Exemption Determination Letter from IRS
Beneficial Ownership Certification
For any legal entity account, the bank will hand you a beneficial ownership certification form. Federal rules require it to identify every individual who owns 25 percent or more of the entity, plus at least one person with significant managerial control such as a CEO, president, or managing member.5eCFR. 31 CFR 1010.230 – Beneficial Ownership Requirements for Legal Entity Customers For each person named, the bank collects a name, address, date of birth, SSN (or passport number for non-U.S. persons), and a copy of an ID. If no one crosses the 25 percent threshold, the bank still needs information for one person with day-to-day control.
This is a separate obligation from the Corporate Transparency Act’s FinCEN filing. As of March 2025, all domestic entities are exempt from the FinCEN beneficial ownership report.6FinCEN.gov. Beneficial Ownership Information Reporting The bank’s collection at account opening still applies.
What Happens at the Bank
Opening is usually a single visit. For entity accounts with multiple signers, most banks want all principal signatories present in person to sign the signature cards. A single authorized representative can sometimes open online for a simple entity, but multi-member LLCs and corporations with multiple signers almost always need to appear.
Staff will verify each named signer. Federal anti-money laundering rules require the bank to collect, at minimum, each signer’s name, date of birth, address, and identification number, then run verification appropriate to the account’s risk profile.7Federal Financial Institutions Examination Council. FFIEC BSA/AML Examination Manual – Customer Identification Program It is not waivable, no matter how well-known the group is locally.
Most business checking accounts require a minimum opening deposit, commonly $100 to $500 depending on the tier. Monthly maintenance fees for basic business accounts typically run $0 to $20, with waiver options based on minimum balance or transaction volume. Ask about cash deposit limits, since many accounts charge fees once cash deposits exceed a monthly threshold.
Set Signature Authority Before You Fund the Account
Who can do what with the money is the single most important decision your group will make about the account, and the one groups most often rush.
Banks let you set how many signatures a transaction requires. For daily operations, most groups allow any authorized signer to write checks or move funds up to a set dollar amount, then require two signatures above that. Dual control keeps one person from draining the account alone.
Here is what many groups miss: even with a dual-signature rule on file, your account agreement likely says the bank does not actually verify signatures on checks. The rule works as an internal control your group enforces, not as a processing check the bank runs. If one signer writes a large check alone, the bank will probably pay it, and your recourse would be against the signer, not the bank.
For entity accounts moving real volume, ask about Positive Pay. The service matches every check or ACH debit presented against a list of transactions you have pre-approved. Anything not on the list triggers a notification so you can approve or reject before the bank pays. That adds a layer internal controls alone cannot match.
Update the signature card the moment anyone leaves or joins. That takes a new resolution or updated meeting minutes naming the change, plus ID for any new signer. A former member whose authority is still on file can legally withdraw funds until the bank processes the update. Banks do not act on verbal requests or informal emails; they need the formal internal documentation. Removing a co-owner from a joint account is harder, because most banks and state laws require the other person’s consent to remove them.8Consumer Financial Protection Bureau. Can I Remove My Spouse From Our Joint Checking Account If the departing co-owner will not sign, the practical fix is to close the account and open a new one.
How FDIC Insurance Applies to Group Deposits
FDIC insurance covers deposits up to $250,000, and the way that limit works depends on the account type.9FDIC. Understanding Deposit Insurance
For a joint account, each co-owner’s share is insured up to $250,000 at a single bank. The FDIC assumes equal shares unless the bank’s records show otherwise.10FDIC. Joint Accounts A joint account with four co-owners can carry up to $1 million in coverage at that institution.
For an entity account, all deposits held by a single corporation, partnership, or unincorporated association at one bank are aggregated and insured to a total of $250,000, regardless of how many members or signatories are on the account.11FDIC. Corporation, Partnership and Unincorporated Association Accounts Multiple accounts under the same entity at the same bank still share one $250,000 cap. Groups holding large balances through an entity should spread funds across separate FDIC-insured banks.
How Interest Gets Taxed
Interest earned on the account is reported to the IRS, and the reporting differs by account type.
On a joint account, the bank issues a single Form 1099-INT under the primary account holder’s SSN. The IRS attributes the full amount to that person unless they redirect it. If the interest actually belongs to several co-owners, the primary holder reports the whole amount on Schedule B, then uses the nominee procedure to reassign each co-owner’s share back to them; each co-owner then reports their portion.12Internal Revenue Service. Topic No. 403 – Interest Received Skip that step and the primary holder pays tax on interest they never received.
On an entity account, the 1099-INT is issued under the EIN, and the entity is the taxpayer of record. A corporation reports interest income on Form 1120.13Internal Revenue Service. Form 1120 – U.S. Corporation Income Tax Return A partnership reports it on Form 1065 and passes each partner’s share through on a Schedule K-1.
Liability: What Each Structure Actually Protects
This is where the account choice hits hardest.
Joint account holders share joint and several liability. If the account is overdrawn or owes fees, a creditor can pursue any single co-owner for the full amount, not a proportional share. Personal bank accounts, wages, and other assets are all reachable. For a small informal group, that risk is usually manageable. For groups handling meaningful sums, it is a reason to form an entity instead.
A properly maintained business account puts a legal barrier between the entity’s debts and members’ personal finances. A creditor of the LLC or corporation can go after the entity’s assets but generally cannot reach members’ personal property. The protection holds only if you treat the entity as real. Mixing personal and business funds, paying personal bills out of the business account, or skipping basic records gives creditors grounds to ask a court to disregard the entity, sometimes called piercing the corporate veil.
Keeping the separation intact does not require elaborate bookkeeping. Use the entity account only for entity business, keep personal funds in a separate personal account, document major financial decisions in minutes or resolutions, and file the entity’s tax returns on time.
When a Co-Owner Dies
Most joint bank accounts carry a right of survivorship, which means a deceased co-owner’s share passes automatically to the surviving owner or owners, outside probate and outside the deceased’s will.14Consumer Financial Protection Bureau. What Happens if I Have a Joint Bank Account With Someone Who Died Not every account is set up that way, so check the account agreement or confirm with the bank. Entity accounts work differently, because it is ownership of the entity, not the bank account itself, that determines what happens when a member dies.