The management of your organizations money is a critical part of what you do. What do you need to look for in a bank account for your nonprofit organization? Once you have incorporated your non-profit organization as a separate legal entity with its own name and employer identification number (EIN), you can open up a bank account for the organization. You do not have to wait until you get a tax-exemption from the IRS.
Keep in mind that not all banks and not all bank accounts are created equal. Taking the time to comparison shop is to your advantage now because of what it could cost you down the road. I would encourage you not to automatically choose the bank that you use for your personal account.
This type of account might have a lower minimum deposit and lower monthly fees or transaction costs than a regular business account at the bank. Do not assume that the nonprofit account is automatically your best option, however. The account might work for many nonprofits but have restrictions, lack services, or have high fees for specific transaction that just don’t work for your situation.
Look at online banks. Because they have less overhead, online banks often charge lower fees and provide better interest rates. See if your nonprofit organization would be eligible for a credit union account. Because the account holders are the owners (instead of shareholders, as is the case with regular banks), credit unions tend to charge less and give out more interest.
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Copyright © 2024 Aplos Software, LLC. All rights reserved.
Aplos partners with Stripe Payments Company for money transmission services and account services with funds held at Fifth Third Bank N.A., Member FDIC.