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Jason Steele
Jason Steele
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Jason is a freelance writer and an nationally recognized expert in credit cards and award travel. As a contributor to Newsweek’s personal finance team, he brings is knowledge and experience in credit cards and personal finance, along with his passion for award travel. Since 2008, Jason written for over one hundred different outlets and has been widely quoted in mainstream media. Jason is a graduate of the University of Delaware, and he lives in Denver, Colorado.
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Robert Thorpe
Robert Thorpe
Senior Editor
Robert is a senior editor at Newsweek, specializing in a range of personal finance topics, including credit cards, loans and banking. Prior to Newsweek, he worked at Bankrate as the lead editor for small business loans and as a credit cards writer and editor. He has also written and edited for CreditCards.com, The Points Guy and The Motley Fool Ascent.
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Published January 24, 2024 at 9:55 am
Editorial Note: Opinions expressed here are author’s alone, not those of any bank, credit card issuer, hotel, airline or other entity. This content has not been reviewed, approved or otherwise endorsed by any of the entities included within the post.
Non-profit organizations have unique financial circ*mstances because they don’t distribute profits to private owners or shareholders. But they still have financial needs and responsibilities that they are required to fulfill. While nonprofit organizations are typically tax-exempt and small businesses are not, nonprofits still participate in various business-like activities, including purchasing resources, collecting money and applying for loans.
The best banks for nonprofits can be traditional banks or credit unions. They offer similar features to banks for small businesses, with some differences. Banks for nonprofits may offer low fees or low or no minimum balances, socially conscious objectives or additional services to assist with grant applications, loans or collecting donations.
Here’s a look at the best banks for nonprofits, based on annual percentage yields (APY), fees, customer experience, minimum deposit requirements, minimum balance requirements, digital experience and access.
Our Methodology
Newsweek Vault’s banking experts have done hundreds of hours of research to present you with all the latest information about your banking options. Whether you’re interested in opening a new checking account or savings account, our research spans all the top online banks, credit unions and brick-and-mortar branches.
We assessed the following five key factors to help you choose the best account for your personal finance needs.
- Associated fees
- ATM access
- Balance requirements
- Customer service
- Interest-earning potential
Our Picks
- Best brick-and-mortar bank for nonprofits: U.S. Bank Nonprofit Business Checking
- Best high APY checking for nonprofits: LendingClub Tailored Checking
- Best socially conscious bank for nonprofits: Amalgamated Bank Small Business Checking
- Best credit union for nonprofits: United Federal Credit Union Nonprofit Checking
- Best high-yield savings for nonprofits: Live Oak Bank Business Savings
- Best increased FDIC insurance coverage for nonprofits: Bluevine Business Checking
- Best regional bank for nonprofits: Truist Community Checking
- Best for small nonprofits: Citizens Bank Clearly Better Business Checking
- Best for small business customer support for nonprofits: Wells Fargo Initiate Business Checking Account
- Best for ATM use for nonprofits: Axos Nonprofit Money Market
Best Banks for Nonprofits of 2024
Best Brick-And-Mortar Bank for Nonprofits
U.S. Bank Nonprofit Business Checking
U.S. Bank Nonprofit Business Checking
Vault Verified
Why We Chose It
U.S. Bank is one of the few brick-and-mortar banks that offers free nonprofit business checking with no monthly fees and an annual bucket of free transactions and cash deposits. U.S. Bank also offers a nonprofit business credit card that doesn’t require a personal guarantor. The account also offers merchant services to help your nonprofit organization accept donations online.
Pros
- No monthly fees
- 1,800 free transactions per year
- Offers merchant services
Cons
- $100 minimum balance
- Low APY
- Overdraft fees
Best High APY Checking For Nonprofits
LendingClub Tailored Checking
LendingClub Tailored Checking
Vault Verified
Why We Chose It
LendingClub is an online bank that offers a solid APY for a business checking account. Plus LendingClub offers additional perks like unlimited ATM fee rebates and 1% cash back on some debit card purchases.
Pros
- 1.50% APY
- No overdraft fees
- Unlimited ATM fee rebates
Cons
- $100 minimum balance
- Monthly maintenance fees for balances below $500
- No bonus
Best Socially Conscious Bank for Nonprofits
Amalgamated Bank Small Business Checking Plus
Amalgamated Bank Small Business Checking Plus
Vault Verified
Why We Chose It
Amalgamated Bank is committed to sustainability and investing in social causes. The small business checking account doesn’t require minimum balances and it comes with a business debit Mastercard.
Pros
- Commitment to sustainability and investing in social causes
- No minimum balance requirement
- Comes with a business debit Mastercard
Cons
- Limited number of free transactions
- $20 monthly fee if monthly balance falls below $15,000
- No bonus
Best Credit Union for Nonprofits
United Federal Credit Union Nonprofit Checking
United Federal Credit Union Nonprofit Checking
Vault Verified
Why We Chose It
The United Federal Credit Union Nonprofit Checking account has no monthly fees and no minimum balances. Plus, it comes with a Visa debit card and five free foreign ATM transactions per month, which can be helpful for nonprofit organizations that deal with foreign transactions.
Pros
- No minimum balance or monthly fees
- 1,000 free combined monthly check deposits and debit card transactions
- Comes with Visa debit card and five free foreign ATM transactions per month
Cons
- No bonus
- Limited additional services
Best High-Yield Savings for Nonprofits
Why We Chose It
The Live Oak Bank Business Savings account offers a high APY of 4.00%, no monthly fee and no minimum opening deposit requirement.
Pros
- No monthly fee
- 4.00% APY high-yield savings account
- No minimum opening deposit
Cons
- No bonus
- No ATM or debit card access
- No weekend customer support
Best Increased FDIC Insurance Coverage for Nonprofits
Why We Chose It
The Bluevine Business Checking account offers access of up to $3 million in FDIC insurance for nonprofit organizations that deal with a large cash flow. Plus, there are no monthly fees, minimum opening deposit requirements or overdraft fees.
Pros
- Up to $3 million in FDIC insurance
- No monthly fees
- 2.00% APY
Cons
- No bonus
- Cash deposits limited to $2,000 per day plus service fees
- Fee for using out-of-network ATMs
Best Regional Bank for Nonprofits
Why We Chose It
The Truist Community Checking account is designed specifically for nonprofits located in the South, East and Midwest. The Truist Community Checking account has no monthly fees and unlimited free cash deposits. Plus, it comes with a business debit card.
Pros
- No monthly fee
- Unlimited free cash deposits
- Comes with a business debit card
Cons
- Charge for more than 225 transactions per month
- No bonus
- No APY
Best for Small Nonprofits
Citizens Bank Clearly Better Business Checking
Citizens Bank Clearly Better Business Checking
Vault Verified
Why We Chose It
The Citizens Bank Clearly Better Business Checking account offers no monthly fees and no minimum opening deposit requirements for small nonprofits located in New England, Mid-Atlantic and Midwest regions.
Pros
- No monthly fees
- No minimum balance
- Comes with a business debit card
Cons
- No bonus
- Charge for more than 200 transactions per statement period
- Small ATM network
Best Small Business Customer Support for Nonprofits
Wells Fargo Initiate Business Checking Account
Wells Fargo Initiate Business Checking Account
Vault Verified
Why We Chose It
The Wells Fargo Initiate Business Checking Account offers dedicated small business customer support for its nonprofit customers who can visit one of the 4,400 U.S. branch locations. The account also comes with a debit card.
Pros
- Dedicated small business customer support
- Comes with a debit card
- Access to over 4,400 U.S. branches
Cons
- Charge for more than 100 transactions per month
- Potential for $10 monthly fee
- No APY
Best for ATM Use for Nonprofits
Why We Chose It
The Axos Bank Nonprofit Money Market account is specifically for nonprofits who want to deal with an online-only bank. It offers unlimited domestic ATM reimbursem*nts, comes with 50 free checks and earns 0.20% APY.
Pros
- Earns 0.20% APY
- Comes with 50 free checks
- Unlimited domestic ATM reimbursem*nts
Cons
- Minimum deposit requirement of $1,000
- $5 monthly fee if monthly balance falls below $2,500
- Charge for more than 25 transactions per month
What Is a Nonprofit Organization?
A nonprofit organization is a business that furthers a social cause and provides a public benefit. Non-profit organizations are also called NPOs or 501(c)(3) organizations based on the section of the tax code that allows them to operate. They must meet certain requirements and avoid engaging in certain types of activities to qualify as a nonprofit under 501(c)(3).
The Internal Revenue Service (IRS) grants tax-exempt status to nonprofit organizations. Donations to a nonprofit are typically tax-deductible to individuals and businesses, and the nonprofit doesn’t pay tax on any donations they receive or any money earned through fundraising activities.
How To Choose a Bank for Your Nonprofit
Every nonprofit will have different priorities for choosing a bank. Some nonprofit organizations may want minimal fees and a high rate of return, while others may prefer in-person branches and values that align with their own.
- Fees: Some banks charge fees such as maintenance fees, while others do not. Some banks offer free business checking accounts or options designed for nonprofit organizations.
- Accessibility: Some nonprofit organizations prefer online banks while others prefer in-person bank branches. If you prefer in-person banks, having branches nearby that offer services such as financial advising could be helpful.
- Rate of return: Banks offer different annual percentage yields (APY), which provide returns on funds in the account. Online banks and credit unions may offer higher rates of return than traditional brick-and-mortar banks.
- Values: Since nonprofit organizations usually stand for specific causes, it may be important to bank with institutions that align with the same values. Non-profit organizations may want to look at the financial institution’s environmental policies, political policies, community outreach efforts or business activities.
Additional services: Some banks offer additional services beyond the business checking account. These could include high-yield business savings accounts, nonprofit business loans or financial advising.
Frequently Asked Questions
Why Should Nonprofit Organizations Open a Bank Account?
Although nonprofit organizations are tax-exempt by the IRS, they still have financial needs like any organization. Non-profit organizations may deal with collecting revenue and donations, protecting funds, maintaining cash reserves, paying vendors and staff, applying for loans and funding and purchasing commercial property. These financial activities require a bank account.
Plus, bank accounts allow nonprofit organizations to organize and track their finances, which is important for maintaining the nonprofit’s tax-exempt status and reporting deposits to the IRS.
What Is Special About a Nonprofit Bank Account?
Some bank accounts are designed specifically with nonprofits’ needs in mind. These bank accounts may offer services to protect collected money, prepare for emergencies, manage cash flow or apply for tax-exempt loans. Banks may also provide a line of credit to nonprofit organizations to help protect against overdrafts and make purchases in emergencies where extra cash is needed.
What Do You Need To Open a Nonprofit Bank Account?
Specific requirements for each bank may vary slightly, but there are some common items that most bank accounts will ask for when opening up a nonprofit bank account. To open the account, you will need a tax ID number, your articles of incorporation and a list of officers. Some banks have additional requirements, like a minimum opening balance, the minutes of your last organizational meeting, your organizational bylaws, officer information or a signature from your board secretary. Some banks also require two officers to co-sign the account.
Related Articles
- Best Business Checking Accounts
- Best Business Credit Cards
- Business Credit Cards for Bad Credit
- Best Online Business Loans
Editorial Note: Opinions expressed here are author’s alone, not those of any bank, credit card issuer, hotel, airline or other entity. This content has not been reviewed, approved or otherwise endorsed by any of the entities included within the post.
Jason Steele
Contributor
Jason is a freelance writer and an nationally recognized expert in credit cards and award travel. As a contributor to Newsweek’s personal finance team, he brings is knowledge and experience in credit cards and personal finance, along with his passion for award travel. Since 2008, Jason written for over one hundred different outlets and has been widely quoted in mainstream media. Jason is a graduate of the University of Delaware, and he lives in Denver, Colorado.
Read more articles by Jason Steele
As an expert and enthusiast, I don't have personal experiences or a background like a human expert. However, I can provide you with information on the concepts mentioned in the article you shared. Here's a breakdown of the key concepts mentioned:
-
Nonprofit Organizations:
- Nonprofit organizations, also known as NPOs or 501(c)(3) organizations, are businesses that further a social cause and provide a public benefit.
- They are tax-exempt and must meet certain requirements to qualify as a nonprofit under section 501(c)(3) of the tax code.
- Nonprofits rely on donations and fundraising activities to support their operations.
- They have financial needs such as collecting revenue, maintaining cash reserves, paying vendors and staff, and applying for loans.
- Nonprofits need bank accounts to organize and track their finances, maintain their tax-exempt status, and report deposits to the IRS.
-
Choosing a Bank for Nonprofits:
- Nonprofits have different priorities when choosing a bank.
- Factors to consider include fees, accessibility (online or in-person branches), rate of return (APY), values alignment, and additional services offered by the bank.
- Some banks offer specific accounts designed for nonprofits, which may provide services to protect funds, manage cash flow, or apply for tax-exempt loans.
- Nonprofits may also need additional services like high-yield savings accounts, nonprofit business loans, or financial advising.
-
Best Banks for Nonprofits (as mentioned in the article):
- U.S. Bank Nonprofit Business Checking: Offers free nonprofit business checking with no monthly fees, free transactions, and cash deposits. Also offers merchant services.
- LendingClub Tailored Checking: An online bank that offers a solid APY for a business checking account, unlimited ATM fee rebates, and 1% cash back on some debit card purchases.
- Amalgamated Bank Small Business Checking Plus: Committed to sustainability and investing in social causes. Offers a business checking account with no minimum balance requirement and a business debit Mastercard.
- United Federal Credit Union Nonprofit Checking: No monthly fees or minimum balances. Comes with a Visa debit card and five free foreign ATM transactions per month.
- Live Oak Bank Business Savings: Offers a high APY of 4.00% for a business savings account, no monthly fee, and no minimum opening deposit requirement.
- Bluevine Business Checking: Offers increased FDIC insurance coverage for nonprofit organizations dealing with large cash flows. No monthly fees, minimum opening deposit requirements, or overdraft fees.
- Truist Community Checking: Designed specifically for nonprofits located in the South, East, and Midwest regions. No monthly fees and unlimited free cash deposits.
- Citizens Bank Clearly Better Business Checking: No monthly fees or minimum opening deposit requirements for small nonprofits located in specific regions.
- Wells Fargo Initiate Business Checking Account: Offers dedicated small business customer support and access to U.S. branches.
- Axos Bank Nonprofit Money Market: Specifically for nonprofits dealing with an online-only bank. Offers unlimited domestic ATM reimbursem*nts, 50 free checks, and earns 0.20% APY.
Please note that the information provided above is based on the article you shared. If you have any specific questions or need further clarification, feel free to ask!
