Nonprofit organizations can and do use regular bank accounts to conduct their operations, receive donations and pay vendors. While charities can use regular business bank accounts, many banks offer special nonprofit accounts with discounted fees and other perks to help charitable organizations carry out their missions. Nonprofits need to consider several factors when determining the best bank account for their organization. Show
Minimum BalancesMany nonprofits operate on a cyclical basis and have wide variations in their account balances. Some organizations are flush during the holidays but not in the summer, while others receive a high percentage of donations at the end of the month but struggle during the middle. Banks have different policies on minimum balances that must be maintained for the account holder to avoid additional fees on checking and savings accounts. Nonprofits should investigate minimum balance requirements to ensure they meet the needs of the organization. Some banks may waive minimum balance requirements on nonprofit accounts. FeesIn addition to minimum balance fees, banks can charge fees for monthly maintenance, coin counting, check writing, automatic teller machine use and numerous other services. These charges can add up to a significant monthly sum for a nonprofit organization. Charities should consider fee policies when choosing a financial institution. Ask whether the bank would be willing to waive some fees on a nonprofit account. Credit Card ProcessingIf your organization will be processing credit cards online or in person, ask banks for their fee schedules and average processing time. Your nonprofit will want to shop around for rates and make sure the bank does not take an inordinate amount of time to move money into your account. Interest RateNonprofit organizations that carry significant sums in money market or savings accounts can shop around for the best interest rates offered by local, national and online banks. Rates offered on checking, savings and money market accounts can vary widely among financial institutions. ConvenienceBranch and ATM locations, office hours and ease of online banking are all important considerations when determining a banking partner for a nonprofit organization. Nonprofit employees will want to make sure that depositing gifts and making payments to vendors is easy, convenient and secure. Philanthropic SupportMany banks are major charitable givers. Nonprofits are wise to consider potential financial support from banks when determining which institution to use. Smaller regional banks often offer the chance for stronger personal relationships and thus more sponsorship gifts to the organization, but these gifts can sometimes be outweighed by higher fees or more restrictive rules. References Writer Bio Joe Garecht is an entrepreneur, author and speaker. He is the founder of two consulting firms, as well as two retail service businesses. As a consultant to nonprofit organizations, Garecht has raised in excess of $25 million. Garecht is a graduate of Rutgers University, where he earned a B.A. in political science. Image Credit Ryan McVay/Photodisc/Getty Images What is Nonprofit Business Checking?Ideal for your unique banking needs, this business checking account offers no monthly maintenance or balance fees with a minimum $100 opening balance1. Nonprofit Checking Features
Open a Nonprofit Checking account onlineHave these documents ready: 1 Your Employer Identification Number (EIN) or tax ID number 2 A charter, Articles of Organization, or a similar legal document showing when your company was formed and the officers of your organization 3 Government-issued photo ID and Social Security numbers for anyone authorized to make transactions on behalf of your organization Compare Top Business Banks Check out our roundup of best banks for small businesses and compare offers to find the right bank for you. The best banks for nonprofit organizations offer a free or low-fee business checking account, access to credit and ample online tools that help streamline your operations. We scoured our top-rated business accounts to find those with features and services tailored to nonprofit organizations. LendingClub: Best online bank for nonprofitsLendingClub is a top-rated online bank that offers traditional business solutions with a few added perks. The bank’s Tailored Business Checking account, for example, offers unlimited ATM fee rebates and 1% cash back on some debit card purchases. at LendingClub Bank, Member FDIC Business checking
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U.S. Bank: Best brick-and-mortar bank for nonprofitsU.S. Bank’s free nonprofit business checking account includes an annual bucket of free transactions and cash deposits, plus merchant services to help your organization accept donations online. The bank also offers a nonprofit business credit card that does not require a personal guarantor. at U.S. Bank, Member FDIC Business checking
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Bluevine: Best non-bank option for nonprofitsBluevine technically isn’t a bank — it’s a financial technology company — but its high-yield business checking and business lending options could be a great fit for digital-savvy nonprofit organizations. Rest assured, all deposit accounts are FDIC insured up to $250,000. at Bluevine, Deposits are FDIC Insured Business checking
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Fifth Third Bank: Best regional bank for nonprofitsFifth Third Bank’s Business Standard Checking account typically carries an $11 monthly service fee, but that charge is waived for nonprofit organizations. The regional bank operates more than 1,200 retail branches in 11 states, and customers have access to roughly 50,000 fee-free ATMs across the country. Business checking
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Community banks, credit unions and CDFIsLocalized nonprofit organizations may find a better fit with a community bank or credit union. These financial institutions typically offer business banking and lending services, but may be better aligned with your organization's mission than a national bank or for-profit financial institution. Credit unions, for example, are also not-for-profit organizations. Nonprofit organizations may also want to seek out Community Development Financial Institutions, or CDFIs. These banks and credit unions have a strong community focus and serve people who are often not served by mainstream banking institutions. How to choose a bank for your nonprofitConsider the following factors when choosing a bank for your nonprofit:
What kind of bank account do I need for a non profit?Technically, all you need to open up a nonprofit bank account are your articles or incorporation, a tax ID number, and a list of officers! However, many banks will require a minimum opening balance or ask for meeting minutes.
Do nonprofits need a special bank account?You need the bank account for the nonprofit to pay your IRS form 1023 application fee, open a PayPal account or similar payment processing accounts for accepting donations, and most importantly, regardless of the available funds, you should absolutely refrain from using your own personal account for the official ...
Can a nonprofit use a personal bank account?Don't use your personal bank account to receive, hold or disburse money for your nonprofit. Make sure all of your nonprofit's transactions go through a dedicated bank account. Ask your bank whether they offer business chequing accounts tailored to nonprofits.
How much money can a 501c3 have in the bank?As we stated above, there is no limit to how much money a nonprofit can have in reserve. The key is in the organization's financial management, whether that means reinvesting the reserve back into the nonprofit's mission or ensuring financial security by saving money.
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