Having a solid and reliable financial institution is essential to protect the capital of any company. Of course this goes intimately linked to the needs of the company, since depending on what they are, you could benefit from one bank or another. When we don’t talk about companies but about non-profit associations, the picture doesn’t change much. Here we list the best banks for non-profit organizations.
So, if you have or work in an organization non profit, what should you look for? We have prepared a small guide to help you find out.
- 1 How and where to open a bank account for a non-profit organization?
- 2 How to choose a bank for a non-profit organization?
- 3 So what are the best banks for nonprofits in the United States?
- 4 There is no single correct answer, but we hope we have helped you!
How and where to open a bank account for a non-profit organization?
The commercial banks (which are the most popular in the country) are often the first choice on the list of non-profit organizations. But why? Mainly, because they are the most visible in the United States and, at the same time, they have more presence at the national level than any other bank in the financial catalog.
Deciding on a traditional bank does not have to be a bad choice, at least not at first. Consider that many of these institutions offer accounts that have been specially created for non-profit organizations. In addition, as they have a presence throughout the country, they can provide different organizations with a series of services that no other bank could offer.
Smaller or local banks
However, traditional banks are not the only ones on the list. The smaller banks which are generally local, could become an excellent alternative for non-profit organizations, especially those whose work is focused on favoring a certain group within a locality. Although they do not have the presence or the strength of a commercial bank, they provide a series of much closer services that the large national chains do not have.
Of course, every advantage also has its counterpart: a local bank may not be able to offer all the services of a business bank portfolio, such as international bank transfers or exchange between currencies.
Perhaps one of the best banks for nonprofits isn’t a bank after all and is instead a Credit cooperative. The great thing about credit unions is that, just like a non-profit organization, they operate almost free of charge. The fees and commissions charged by credit unions are used to pay for operations, therefore, they are much cheaper and more affordable than traditional banking.
Warning: Before making your choice, keep in mind that some credit unions do not have the proper insurance to offer 501(c) accounts. Therefore, we recommend that you examine the cooperative very well before opening the bank account for your organization.
How to choose a bank for a non-profit organization?
Let’s talk now about the factors you need to study before opening an account for your nonprofit organization. Regardless of whether you choose a credit union, a commercial bank, or a small local bank, there are at least six elements to consider in selecting the best option for your organization and, of course, your pocket.
If what you are looking for is a current account, this factor will not matter much to you; but should. First, because some checking accounts apply an APY on the amount deposited, even if it is a little lower than that of traditional savings accounts. In addition, in the future you may want to open a savings account for the organization or perhaps make a certificate of deposit. Check the APY offered by the bank and also how interest is computed.
#2 Ethical values
Non-profit organizations often seek companies and institutions that share their values or that have an ethical line similar to yours. Make sure you choose a bank or cooperative that meets the ethical standards of your organization and that respects the people you seek to protect.
This could help you in the future, especially if you organize a fundraiser, as the bank could invite their customers to donate to your campaign or even make donations on their behalf.
No bank or financial institution will be of any use to your organization if it is unable to give you the service you need when you need it. Because, Before choosing any bank, ask yourself the following:
- What are the account access rules?
- What are the deposit limits, if any?
- How many people can access the organization account?
- Does the bank offer a mobile banking service? Do you have a mobile app? How useful is it?
- Does the bank have a branch or office close to the headquarters of your nonprofit organization?
- What kind of customer service does the bank provide? Could you access some face-to-face help if you need it?
The more the bank fits the needs of your organization, the better it will be! Do not wait until you need a service to ask yourself if the financial institution you have chosen has them or not.
Working with a bank or cooperative that has a long history or at least enough experience in the financial sector is desirable, especially if you have a non-profit organization. Remember that you must be responsible with the organization’s funds, that is, multiply them, if possible, and protect them against any eventuality. And if you are able to manage those funds in a better way (either because you choose a commission-free account or an institution that provides close and personalized financial advice), much better!
In conclusion? Find out if those banks that are on your wish list have the capacity to offer you what you need. If the financial institution can and knows how to exploit the full potential of your non-profit organization, you are in the right place!
Tip: If you want some perspective, ask for testimonials from current clients of the bank or credit union. These reviews, online or posted on the bank’s website, could give you an idea of the level of satisfaction with the services offered by the institution.
Every time you decide to work with a bank (and more so if it is long-term) the fees are charged especially important. Remember that financial institutions handle a series of fees, charges and commissions that could negatively affect you, especially if you estimate the cost of the account in the future. Our recommendation? Be sure to review the bank’s fee and commission letter. Check if your account is subject to a monthly or annual maintenance fee, charges for transactions that exceed the allowed limit, fees for changing currencies, charges for adding a new user, etc.
Just as savings—that is, interest earned on accounts, or APY—is important, so is credit. Think the chances of access a loan or to one revolving line of credit they could lead your organization to undertake a major project in the future. But the possibilities are not the only thing you need to check: know the interest rates –especially the APR– It is also very important, since it would do you no good to access a loan and be forced to pay the highest interest rate in the country.
So what are the best banks for nonprofits in the United States?
We arrived at the section that interests you the most! And it is that, with so many banks and credit unions in the market, choosing just one could become an extremely difficult task. Remember that you must find an institution that fully covers all your current needs and, if possible, future ones.
To help you in the task, we have selected three options that, in our experience, could give you just what your nonprofit is looking for. Let’s take a look at them!
US Bank is a quite famous and important national commercial bank. Why is it first on the list? Because, in addition to the commercial services it offers (such as payment processing platforms with debit and/or credit cards), it also has a good supply of accounts for non-profit organizations. US Bank’s fees are fairly low, at least when compared to other banks, and it offers about 1,800 free transactions a year. A plus? You also have accounts that earn interest. Not bad, right?
PNC Bank also offers accounts designed specifically for nonprofit organizations.. These accounts often include a business debit card and a number of online banking services that are completely free. With the PNC Bank You can easily pay bills. The best? No minimum balance requirement and no monthly maintenance fees.
Wells Fargo is a great option for nonprofit organizations. It facilitates checking accounts specially designed for them and also gives customers access to online banking. Something we like? Provides payroll services, retirement plans, and other business tools that allow you to manage your organization’s finances from one place.
Don’t forget to think about credit unions or any local banks! By choosing one of these options you will be supporting your community and, in addition, you may be able to enjoy closer and more personalized attention. Most of the alternatives offer services very similar to those of traditional banks. Also, the cost difference could be quite large.
There is no single correct answer, but we hope we have helped you!
As with personal finance, your nonprofit may have some issues choosing a single financial institution. A good option in case of indecision is choose two or three good options that are capable of giving you among all the services that your organization needs.
For example, one bank may offer you a savings account with an APY too attractive to pass up, while another bank’s checking account is much cheaper compared to the first bank. As long as you can create a financial plan that allows you to get exactly what you need, you’ll be fine!
Remember to study the six factors in the guide carefully and, of course, make sure that the values and strength of the financial institution you are interested in is the ideal one for your organization.