Checking Accounts for Nonprofits

Whether you’re an individual, a small business, a large corporation, or a nonprofit, choosing the right financial institution for all your banking needs is an important part of doing business. This decision can save you a lot of time and money, or be very costly in the long run, so you should be sure to make the decision carefully. There are a lot of things you need to consider before opening up your everyday banking account. Here, we discuss some of the key factors you should weigh out for your nonprofit’s checking account and which kind of institution you should choose, as well as a list of the top names in the financial services industry that offer nonprofit accounts.

The best checking account for a nonprofit is most often the account that provides the most utility and solutions that address the needs of the organization. Checking options include accounts that cater to organizations with minimal activity and small balances, to commercial banking relationships that are similar to large businesses.

Before you open that account, the first thing you need to do is determine the banking needs of the organization. Building a checklist of must haves and requirements is a good place to start. Then do a comparison of all the features each institution around you have to offer.

Fees: Take a look at what kind of fees each bank you’re considering charges, and for what. Bank fee structures could cost a lot depending on how you use the account, as well as the balance you intend to keep. You may have to pay a monthly service charge, account maintenance fees, transaction fees, automated teller machine (ATM) fees, check writing and/or check return fees, statement fees, and others. If you’re looking for a specific kind of account, you should also ask about whether it has a required minimum balance, and what the charge is if you dip below that amount.

Standards: Even though they are highly regulated, some institutions may go above and beyond when it comes to ethical guidelines and standards. Since these standards are likely a high priority for your organization as well, you’re probably going to seek a bank that aligns with yours. You can ask your banker to share the institution’s code of ethics, and whether it has a statement of corporate social responsibility. This statement outlines the bank’s business model and how it holds itself socially responsible to its stakeholders and the community.

Branch and ATM Availability: One requirement many individuals and organizations when it comes to their banking needs is accessibility. If you’re the type of organization that depends on the personal touch—whether that’s for everyday banking needs or to apply for credit—you should choose a place that has a physical presence with bank branches. If your organization plans on doing more routine banking like deposits, check writing, and transfers instead of in-branch banking, consider a bank with ATMs and good online banking access.

Interest: As a nonprofit, every penny counts. Some checking accounts pay interest, while savings accounts guarantee some interest income. Ask around about whether banks pay interest on their checking accounts. Find out what the rates are for both checking and savings accounts, and how often they change.

Now that you’ve outlined some of these features, consider whether you’re going to go with a bank or a credit union. Commercial banks have big names and therefore, a big presence. These institutions cater to a wider range of clients, so they may be able to offer a more suitable set of banking options for your nonprofit. Smaller banks, on the other hand, may be more limited in what they can offer. But because of their size and location, you know you’re supporting a business in your local community. The same goes with a credit union, which is a financial cooperative funded by members.

The following are the best checking accounts for nonprofit organizations.

PNC offers an account specifically geared to nonprofits. By keeping an average minimum balance of $500 each month, the bank waives the monthly service charge. The account also comes with a free debit card, and no-fee online banking and bill pay.

This bank offers a no-fee nonprofit account with a monthly minimum balance of $5,000. Anything under that incurs a $14.95 service charge. There are also no charges for internal transfers and for the first 10 bill payments. TIAA does not charge a fee for overdraft protection or for automatic overdraft transfers. All balances in this account earn interest at tiered rates. Accounts with $100,000 or more earn 0.61%.

For nonprofits that accept large amounts of cash, Home Savings Bank offers unlimited currency deposits without fees. Maintaining a $100 minimum balance waives service charges, and accounts can be accessed through the online banking website.

Nonprofits that receive large amounts of coins by participating in fairs, carnivals, and other events may be charged when depositing those coins. Community Credit Union offers coin deposits at no charge, which can result in significant savings. The credit union also pays dividends on balances over $600. This credit union requires a $5 membership payment and maintaining a $5 balance in your account.

For nonprofits seeking to consolidate services with a single provider, the checking account at United Community Bank offers a variety of solutions, including payroll and merchant services. The bank also offers unlimited coin and currency deposits and no monthly maintenance fees.

For large organizations with paid employees and high levels of monthly charge card activity, the Simple Business Checking account at Wells Fargo (WFC) can be linked to the bank’s merchant services and payroll services for automatic deposits and payments. Organizations can also open 403(b) retirement plans for employees, and these plans are specifically designed for nonprofits.

For nonprofits that want to provide debit cards to specific employees, the business checking account for nonprofits from Bank of America (BAC) provides additional cards that can be preset with spending and withdrawal limits. The account waives maintenance fees with a minimum balance of $5,000, which also triggers interest payments to the account.

Low-activity nonprofits with low average balances can keep more of their funds in the account with the Community Checking account offered by BB&T (BBT). The account does not have a minimum balance requirement and does not have maintenance fees. Coin and currency deposits are also free of charge.

With no limits on currency deposits, the nonprofit checking account from M&T Bank (MTB) caters to organizations that accept large cash contributions. Service fees are waived as long as the average balance of the account over each billing cycle exceeds $500. If the account goes under that amount, a $7.50 fee applies at the end of the month. The fee may also be waived if the account is set up for electronic statements. The account also offers online banking access and a bill-paying program.

Opening a nonprofit checking account at a smaller bank will likely include many of same features as national banks, but a local bank with community ties may be more willing to get involved with your organization. This type of involvement may include sponsoring events, sharing information about your nonprofit organization or making charitable contributions. Over time, a partnership with a local bank may yield significant benefits that are not included in standard checking accounts.