Nonprofits have a variety of missions, but they all need a bank account to help manage their money.
Some banks offer accounts specifically geared toward the unique needs of nonprofits. However, some of the best business checking accounts can be a good fit, too. To find the right bank account for your organization, we looked at both types of accounts and identified the ones with the best benefits, lowest fees and highest customer satisfaction ratings.
Best banks for nonprofits
This list focuses primarily on entry-level business checking accounts. However, it also includes banks with track records of assisting nonprofits with bigger financial needs, such as loans to rent office space, hire new employees and capitalize on opportunities to advance their missions.
|J.D. Power Satisfaction Rating
|Min. deposit to open
|Nonprofit Checking Account
|First Citizens Bank
|CORE (Nonprofit) Business Checking
|Business Complete Banking
|0.10% – 1.50%
|LifeGreen Not-for-Profit Checking Account
**Monthly maintenance fee can be waived by meeting certain criteria.
How to choose a business checking account for your nonprofit
When selecting a bank account for your nonprofit, there are several factors to consider. Here are the big ones.
Minimum balance requirements
Make sure you can meet the monthly balance requirements for any account you’re considering for your nonprofit. You might incur monthly maintenance fees or other penalties if you can’t. If you’re just starting out and can’t maintain the required minimum balance, an account with a low minimum balance requirement (or none at all) may be a better option.
Most banks offer business customers -- including nonprofit organizations -- a certain number of free transactions per year or per month. This includes deposits, withdrawals and debits. After you exceed this limit, the bank charges you a fee -- typically between $0.30 and $0.50 -- for each additional transaction. It’s important to consider how often you’ll be moving money in and out of the account to avoid fees.
Customer service options
Will you be collecting cash donations on a regular basis? If so, you’ll want a bank with convenient branch and ATM locations. If you want easy digital account management, you’ll want a bank with a robust and user-friendly app or mobile banking platform. Check out customer reviews to learn what others have thought about their experience working with the bank.
Interest earnings are essentially free money. When you’re looking for an account for your nonprofit, make sure you compare APYs to find a place where your money can grow faster.
While you might be just starting out with a standard business checking account, you’ll need more financial services if things go well for your organization. See if the bank offers special discounts on loans for nonprofits or personalized guidance on other ways to manage and grow your money.
Benefits of opening a business bank account as a nonprofit
Opening a bank account for your nonprofit allows you to do several essential things, including:
- Collecting donations: Many business checking accounts enable you to accept credit card payments, so you can raise funds directly from your website.
- Paying employees and vendors: Business accounts provide convenient ways to pay your staff and partners with payroll services, ACH transfers and other options like Zelle.
- Staying organized: Even though some nonprofits may be exempt from taxes, you still must keep thorough financial records and submit annual reports to the IRS. By keeping a separate bank account from your personal account, you can monitor your transactions more easily.
- Charting a course for growth: Opening a bank account for your nonprofit establishes a relationship with your bank or credit union. As you seek ways to advance your mission, your bank may be a source of financing and advice.
Should you use a local bank for a nonprofit?
While our list of the best banks for nonprofits includes national banks and credit unions, don’t overlook the small financial institutions in your area. There are quite a few local options that can be solid choices for your banking needs. For example, if your business is in the northwest, consider Washington-based Verity Credit Union, where nonprofit customers get exclusive rates on CDs and money market accounts. And if you deal with cash often, having a local branch where you can bring deposits may be more convenient than dealing with ATMs.
Additionally, if you’re focused on improving your community, local institutions may share your mission. However, you’ll want to make sure a local bank can also meet your needs when it comes to product offerings, online banking and other features.
What do you need to open a bank account for a nonprofit?
Some banks may allow you to open a nonprofit bank account online, while others may require an in-person appointment. Regardless of how you open the account, you’ll need to get some paperwork together, including:
- Articles of incorporation in the state where you filed to start the organization
- Bylaws for your organization
- Employer Identification Number (EIN) (if you don’t have one yet, you can apply for one from the IRS)
- Government-issued ID for all officers who will have access to managing the account
What is the FinCEN rule?
FinCEN stands for the Financial Crimes Enforcement Network. FinCEN is a division of the US Treasury, and its mission is to prevent criminals from using the financial industry to launder money. All banks and credit unions must follow FinCEN requirements, which include making efforts to know and understand their customers to avoid bad actors using the financial system for criminal activity. This includes filing IRS form 8300 if you receive cash transactions over $10,000 (daily aggregate) within 15 days of the transaction, under the Bank Secrecy Act.
Do banks report cash deposits to the IRS for nonprofit bank accounts?
Yes. If a cash deposit exceeds $10,000, a bank must file a report with the IRS. This applies to all types of businesses, including nonprofits and for-profit companies.
Can you use a personal bank account for a nonprofit organization?
You can, but it’s not a good idea. While you might be able to get by using your personal bank account for managing your nonprofit, the paper trail can get messy. You’ll need to separate tax-exempt activities (like traveling for the nonprofit) from your personal expenses (like paying for dinner out on Friday night). To reduce the risk of a messy audit, you’re better off opening a separate bank account for your nonprofit organization.