Nonprofit associations, like businesses, generate revenue and expenses. It is essential for nonprofits to maintain a bank account to properly account for these activities. Fortunately, it is not too difficult for a nonprofit to open a bank account. Only a few documents and a trip to the bank chosen by the organization are required. Show
Form a corporation with the state in which the nonprofit will conduct business. A nonprofit may apply for tax-exempt status, and this status is granted by the Internal Revenue Service, not the state where the organization is formed. Generic articles of incorporation or organization are created when you form the entity, but you may draft more individualized rticles if you wish and file them as an attachment to your business formation documents. Read More: How to Change a Corporation From Nonprofit to Profit Apply for an Employer Identification Number (EIN) from the IRS. You can apply for an EIN online on the Internal Revenue Service website. After your application is submitted, you’ll receive the EIN instantly. Apply for nonprofit status with the IRS. After your corporation and EIN have been established, you may complete and submit IRS Form 1023.This form requires information about the nonprofit’s business structure and formation, its officers and its financial arrangements. You’ll also provide information about who will receive benefits from the organization and the activities of your nonprofit. Gather official organization documents required to open your bank account. Standard documents to open a nonprofit account include a copy of your nonprofit’s articles of incorporation, articles of organization or charter, and a copy of the Employer Identification Number issued by the Internal Revenue Service. These documents show when your organization was formed with the state and prove your organization’s tax identification number. Gather information about the organization’s officers. These documents include an official list of all officers and government-issued identification for each officer. Official officer listings may be found in your nonprofit organization documents filed with the state. Banks typically require this information for each officer, even if an officer will not make deposits and withdrawals from the account. Providing a photo ID and Social Security card for each officer is standard, but some banks may also require an additional form of ID. Select a bank. Most national banks offer accounts specifically for nonprofits, but you may also find smaller local banks or credit unions that offer nonprofit products. Review the websites of banks in your area to get information about fees, minimum balances and benefits available to your organization. The best banks for nonprofit businesses should offer accounts with easily waivable fees or none at all. These accounts should allow your nonprofit to conduct its monthly banking business at the least expense to your company possible. Some business checking accounts also offer perks and benefits geared toward nonprofit businesses. While some banks on this list don’t offer specific nonprofit accounts, those are also excellent for nonprofits due to limited fees and outstanding benefits, including interest-earning potential. Here are the eight best banks for nonprofits:
*Bluevine is a business financial technology (fintech) platform backed by Federal Deposit Insurance Corp. (FDIC)-insured Coastal Community Bank. Best Banks for Nonprofits at a GlanceTruist: Best Overall for No Cash Deposit Fees & Most Free TransactionsTruist
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Truist Community Checking OverviewWhen To Use TruistTruist is our best overall bank for nonprofit businesses thanks to no cash deposit and monthly fees, and its Community Checking account is geared toward nonprofit businesses. Of all the banks with a limited number of free monthly transactions, Truist allows the most (225 a month) while charging the least for extra transactions (35 cents each). It also offers free online bill pay and easy digital account management. Cash withdrawals from a Truist ATM are free, while out-of-network charges are $3 domestically and $5 internationally, plus third-party ATM fees. While the merger of SunTrust and BB&T to form Truist should be completed, it’s possible some ATMs may still be branded under one of the former bank names. The biggest drawback is that Truist is a regional bank located in the east, southeast, and Great Lakes regions of the United States. Truist operates in 15 states and Washington, D.C., and you need to visit a branch to open an account. Truist accounts must be opened at a branch location, which are located in North Carolina, South Carolina, Virginia, Maryland, West Virginia, Kentucky, Tennessee, Georgia, Florida, Alabama, Indiana, Texas, New Jersey, Ohio, Pennsylvania, and Washington D.C. Bank of America: Best for Nationwide Access to Business Checking & Ongoing RewardsBank of America
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Bank of America FundamentalsTM Business Checking OverviewWhen To Use Bank of AmericaWhile Bank of America doesn’t have a dedicated nonprofit checking account, the bank’s Fundamentals Business Checking is a good choice for a nonprofit. It has waivable monthly fees with up to $7,500 in free cash deposits each month. While you don’t get as many free transactions as Truist or US Bank, the big advantage Bank of America has is its accounts are available across the US, compared to the other two banks, which are regionally limited. If Bank of America had unlimited free cash deposits, it would likely edge Truist as best overall. If your nonprofit grows and you need more free transactions or cash deposits each month, you can upgrade to Bank of America’s Business Advantage Relationship Banking. You can compare the two accounts to see which is best for your nonprofit business. Bank of America also offers outstanding ongoing rewards. You can earn up to $500 cash back with qualifying actions, in addition to cash back and travel rewards through the company’s business credit cards. You can earn 25% to 75% bonus rewards on credit cards and get a 5% to 20% higher interest rate on business advantage savings accounts. Growing nonprofit businesses can also take advantage of Bank of America’s outstanding business savings, CDs, lending products, and financial analysis through Merrill financial advisors. Bank of America provides everything your business needs as it changes, making it one of the best banks for small businesses. U.S. Bank: Best Bank for Nonprofits With Large Fundraising EventsU.S. Bank
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U.S. Bank Nonprofit Business Checking OverviewWhen To Use U.S. BankU.S. Bank and its nonprofit business checking account are custom-made for nonprofit organizations. It offers up to 1,800 free transactions annually―an average of 150 monthly―and this flexibility helps businesses with irregular transaction schedules, such as nonprofits with large fundraising events a couple of times a year. It also has no monthly fees or minimum balance requirements. You can deposit up to $300,000 in cash for free each year (average of $25,000 a month). The biggest drawback for U.S. Bank is its regional availability. You must reside in one of 26 states to be eligible for a checking account. If you need a traditional brick-and-mortar checking account and don’t reside in one of the states listed below, you might consider Bank of America or Truist. An applicant must reside in Arizona, Arkansas, California, Colorado, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Minnesota, Missouri, Montana, Nebraska, Nevada, New Mexico, North Carolina, North Dakota, Ohio, Oregon, South Dakota, Tennessee, Utah, Washington, Wisconsin, or Wyoming to be eligible for checking account. Axos Bank: Best Digital Bank for Cash Deposits & Refunded ATM FeesAxos Bank
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Axos Bank Basic Business Checking OverviewWhen To Use Axos BankJust like Bank of America, Axos Bank doesn’t offer a business checking account specifically geared toward nonprofit businesses. However, its Basic Business Checking is a good choice for nonprofit businesses as it has no monthly fees and minimum balance requirements. Unlike some online-only banks, Axos Bank allows for cash deposits at all MoneyPass and Allpoint ATMs. In addition, all domestic ATM fees are refunded, which makes this account great if you need to handle cash regularly. In addition, with its Remote Deposit Anywhere feature, you can deposit up to 60 items per month. New checking account signups get up to a $200 bonus. If your nonprofit grows beyond a basic account, Axos Bank also offers Business Interest Checking, an interest-bearing account with up to 1.01% APY for balances of less than $50,000 and 0.20% APY from $50,000 to slightly below $250,000. It also offers business savings, money market accounts, CDs, Small Business Administration (SBA) lending, and mobile and online banking. You also have a workplace banking option to offer low-fee accounts to your employees. It’s an excellent option for nonprofit businesses looking for a digital-only, full-service bank. Wells Fargo: Best Traditional Bank for Small NonprofitsWells Fargo
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Wells Fargo Initiate Business Checking OverviewWhen To Use Wells FargoWells Fargo and its Initiate Business Checking is a good choice for nonprofit businesses. It offers low-cost banking for smaller nonprofits that don’t have many monthly transactions. As long as you have a minimum daily balance of at least $500, the $10 monthly fee is waived. However, you’re limited to just 100 free monthly transactions, and excess transactions are 50 cents each. So, if you have a nonprofit business that exceeds 100 monthly transactions regularly, you should consider Bank of America or Truist instead. With more than 4,500 branches and 12,000 ATMs nationwide, Wells Fargo’s biggest advantage is accessibility. It’s also a full-service bank with business savings, CDs, business lending products, credit cards, and merchant services. It even offers 24/7 fraud monitoring and zero-liability debit card protection. PNC Bank: Best Nonprofits That Want Financial Wellness Programs for StaffPNC Bank
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PNC Bank Non-Profit Checking OverviewWhen To Use PNC BankPNC Bank’s biggest perk with its Non-Profit Checking is access to financial wellness tools, including webinars and seminars. This can be made available to your employees through PNC WorkPlace Banking for Employees, a program that they have to sign up for. As long as you have an average monthly collected balance of $500, the monthly maintenance fee of $5 is waived, and PNC waives the monthly maintenance fee for the first three months regardless of balance. You get up to $5,000 in free cash deposits each month and up to 150 free transactions. PNC Bank also offers business credit cards, business lending products, and merchant services to businesses that need them. While geographically limited like Truist and U.S. Bank, PNC bank is more widely available than both of those banks. Branches are available in 28 states and Washington, D.C. If your nonprofit business is located in one of the areas listed below, you can get an account with PNC. PNC Bank branches are located in Alabama, Arizona, California, Colorado, Delaware, District of Columbia, Florida, Georgia, Illinois, Indiana, Kansas, Kentucky, Maryland, Massachusetts, Michigan, Minnesota, Missouri, New Jersey, New Mexico, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, West Virginia, and Wisconsin. Bluevine: Best for a High APY With No Banking FeesBluevine
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Bluevine Business Checking Overview*Bluevine is a business fintech platform backed by FDIC-insured Coastal Community Bank. When To Use BluevineBluevine doesn’t offer a specific nonprofit checking account and doesn’t have all of the banking products as some of its competitors on this list. However, it features an outstanding business checking product and the best small business line of credit. It’s a digital-only bank that provides a high-yield, interest-bearing checking account. You can earn 1.5% APY on balances up to $100,000 with Bluevine business checking as long as you either spend $500 monthly with the debit card or receive $2,500 in customer payments in a month. The interest earnings make Bluevine one of our leading small business checking accounts available. It also provides two free checkbook orders per year. There are no monthly and transaction fees, and it requires no minimum opening deposit and minimum balance. It also provides great software integrations. However, nonprofits that handle cash regularly may want to consider another option. Cash deposits with Bluevine cost you $4.95 per transaction and can only be done at a Green Dot retail location. Also, it charges $2.50 for out-of-network ATM withdrawals in addition to third-party fees. TIAA Bank: Best for Earning Interest Regardless of Account BalanceTIAA Bank
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TIAA Bank Non-profit Checking OverviewWhen To Use TIAA BankIf you want to earn interest with your business checking regardless of account balance, TIAA Bank is a great choice. Its Non-profit Checking earns interest from the first dollar with no cap on earnings. However, this account can be pricey. You need at least $1,500 to open an account, and you must keep a minimum balance of $5,000 to waive the $14.95 monthly fee. If you can meet these thresholds easily, the account is one of the best on this list. TIAA Bank reimburses ATM fees based on the balance of your account. If you have less than $5,000, it refunds up to $15 a month in fees. If you have $5,000 or more, reimbursements are unlimited. One drawback to TIAA is its limited locations, with just nine branches located in Florida. Otherwise, it’s an online-only bank. If you don’t have access to one of those branches, you cannot make cash deposits, so nonprofits that handle cash regularly should choose another option from this list. How We Evaluated the Best Banks for NonprofitsWe understand that nonprofit organizations desire banking with as few fees as possible. To choose the best banks for nonprofits, we looked for institutions that provided accounts specific to nonprofit organizations and prioritized banking fees, accessibility, and features like bill pay and lending. If an institution didn’t offer a nonprofit-specific account, we looked at how their products and services stacked up compared to others with a specific account. When To Use a Local Bank or Credit UnionThe benefit of choosing a local bank or credit union over a traditional or online bank is the ability to build a local relationship. Nonprofits often find it easier to go to local credit unions and community banks for sponsorships, grants, and donations. In some cases, banks will determine their donation decisions by whether that nonprofit is a customer or not. If a solid community relationship is more important to you than having a large bank network, a local bank or credit union is the best option. What You Need To Open a Business Bank AccountEach provider on this list may require different documents to open a business bank account. Generally, you’ll need:
Frequently Asked QuestionsHow to choose a bank for your nonprofit?When considering a bank for your nonprofit business, you need to find one with limited fees. This includes both monthly fees and fees incurred for transactions and cash deposits. What type of bank account is best for a nonprofit organization?Generally, you should choose a business checking account geared specifically toward nonprofit businesses. Not only will these accounts have limited fees, but the banks often offer guidance and perks that can help your nonprofit. Do nonprofits need a special bank account?While many banks offer specific business checking accounts for nonprofit businesses, it isn’t required that you choose these accounts. Any small business checking account, which charges limited fees and provides excellent support for your nonprofit, will work. Bottom LineWhen choosing a business checking account for your nonprofit business, get one with limited fees and great business support. Accounts should be free or have easy-to-waive monthly fees. In addition, if your business handles cash regularly, the account should allow for free cash deposits. Some banks also offer perks and support geared specifically toward nonprofit organizations. Consider each bank and its strengths and choose the one that best meets the needs of your nonprofit. What do I need to open a bank account for nonprofit?Open a Nonprofit Checking account online. Your Employer Identification Number (EIN) or tax ID number.. A charter, Articles of Organization, or a similar legal document showing when your company was formed and the officers of your organization.. What type of bank account is best for nonprofits?Localized 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.
Can a non profit 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.
Can I open a bank account for an organization?You can open a business bank account once you've gotten your federal EIN. Most business bank accounts offer perks that don't come with a standard personal bank account. Protection. Business banking offers limited personal liability protection by keeping your business funds separate from your personal funds.
How much money can a nonprofit 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.
How does an Organisation open a bank account?Acceptable Identity Proof verifying Legal Name. Passport.. PAN card.. Voter's Identity Card.. Driving License.. Job Card issued by NREGA duly signed by an officer of the State Government.. Letter issued by the Unique Identification Authority of India ( UIDAI) containing details of name, address and Aadhaar number.. |
How to open a bank account for non profit organization
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