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A new report from the Foundation for Tax-Exempt and Nonprofit Organizations highlights five banks that are friendly to nonprofits. The foundation recommends checking these institutions’ financial strength, level of risk management, customer service levels, technological capabilities, and fees.
Nonprofit organizations have their own set of financial issues, so the last thing they need is a banking crisis. Nonprofit checking accounts provide low-cost, easy-to-use banking with features designed to assist groups in managing their money. It’s even better if the nonprofit bank is devoted to community development and helping organizations like yours prosper.
The following banks are the best for nonprofits:
- Overall, U.S. Bank is the best full-service nonprofit bank.
- PNC Bank is the best option for organizations with at least $500 in their account.
- TIAA Bank is the best place to go if you want to earn an annual percentage yield (APY) on any amount.
- Wells Fargo is the best bank for small charities.
- BlueVine: The best option for generating a consistent APY while avoiding banking costs.
Selecting the Correct Bank
Traditional banks, online-only banks, community banks, and local credit unions are among the best banks for NGOs. The most important factor in choosing the best bank is to consider what your company needs the most. Traditional banks, with many branches and full-service banking, regularly score among the top banks for small companies. Because these banks are built to manage enormous volumes of transactions and cash deposits, they’re an excellent match for cash-handling NGOs.
Digital banks, on the other hand, provide easy banking with app integration and lower costs, making them a cost-effective solution for organizations that conduct few transactions and do not use cash. Because there are no physical locations, these banks may reduce their costs. Credit unions and small banks, on the other hand, are locally established.
Overall, U.S. Bank is the best bank for nonprofits.
Why we like it:
The nonprofit checking account from U.S. Bank is designed for nonprofit organizations of all sizes and includes up to 1,800 free transactions per year (150 per month). Your account may adjust to your company demands, allowing you to have more transactions one month or season and fewer the next. Even better, there are no monthly fees or minimum balance requirements, making this one of the finest business checking accounts available.
This account also includes 300 free cash deposits each year, allowing you to handle cash at a cheaper cost. You may also bank in person at one of the more than 3,000 branch locations, and significant monetary contributions won’t be a problem. However, branches are predominantly found in the Midwest and the Western United States.
Many organizations value community involvement, and U.S. Bank is no exception. It gave $60 million to local communities in 2019, including grants and sponsorships, and its workers contributed 334,000 hours. Given how crucial it is for major banks to give to their communities, this commitment is a bonus.
PNC Bank: Best option for non-profits with a budget of $500 or more.
Why we like it:
PNC Bank is wonderful for NGOs, with over 2,300 locations nationally and its own form of nonprofit checking geared particularly for not-for-profit enterprises. To avoid the monthly charge, you’ll need an average minimum balance of $500. PNC, on the other hand, waives such charges for the first three months. Standard business features, such as business debit cards and bill pay services, are available for free with a starting deposit of at least $100.
PNC’s charity checking account, like U.S. Bank’s, allows you to make 150 transactions each month for free, after which you’ll have to pay an extra 50 cents per transaction. However, like with other business checking accounts, you’ll be allowed to deposit up to $5,000 every month without incurring any fees. After that, for every $100 placed, you’ll have to pay 25 cents. You won’t have to worry about monthly transaction fees if your monthly volume is typically modest.
With the PNC Foundation, a $500 million project to assist youngsters to prepare for school, PNC also has a purpose to aid communities. It also provides sponsorships on par with bigger banks, ensuring that you’re banking with a corporation that cares about the community.
TIAA Bank: Best place to get APY on any balance.
Why we like it:
With TIAA Bank’s charity account, you’ll need a $5,000 minimum balance to avoid monthly fees, but you’ll earn a higher APY than other business savings accounts. Plus, you’ll get that APY on any amount, but you’ll need a minimum deposit of $1,500 to get started. Because TIAA Bank has no physical offices, it’s an excellent choice for NGOs that aren’t afraid of banking online.
However, despite its many benefits, this account only allows you to make 10 free bill payments each month, after which each payment will cost you 50 cents. Businesses who fail to maintain a $5,000 minimum balance will be charged $14.95 per month, which may soon add up. This account is still a good choice if your organization can afford the minimal amount.
The goal is to help the local community by offering financial products such as house loans to neglected areas. However, via its nonprofit foundation, TIAA Bank gave more than $10 million to philanthropic groups around the state. Even if you don’t live in Florida, there may be other compelling reasons to bank here.
Wells Fargo: Best for Small Nonprofits
Why we like it:
For those who prefer conventional banks, Wells Fargo Simple Business Checking provides low-cost banking for small charities. You’ll receive your first 50 transactions free per month, and you’ll be able to deposit up to $3,000 in cash without incurring any fees. Wells Fargo’s strength, on the other hand, is its accessibility. It’s simple for any company to create and maintain an account since it has more locations than any other bank in the United States.
Businesses enjoy free bill pay and access to a network of over 3,000 ATMs with this account, which does not pay interest. To avoid the $10 monthly charge, you must maintain a $500 minimum balance. Aside from that, the costs are typical of a regular checking account, making it suitable for any small company, even NGOs.
Wells Fargo also offers local and national grant initiatives in addition to employee volunteerism. For example, Wells Fargo is allocating $175 million to COVID-19 community relief operations, allowing the bank to finance roughly 1,000 NGOs in over 800 towns. Although other major banks are likely to participate in the same way, Wells Fargo makes a statement with its donations.
BlueVine: Best for Free Checking with a High APY
We like it:
This nonprofit checking account has no minimum balance, no nonsufficient funds (NSF) penalties, and no inbound wire fees. Plus, on balances of at least $1,000, you’ll get a high APY, which is substantial by any measure. Despite the lack of physical locations, you may use over 38,000 ATMs and get your first two checkbooks for free.
The business items are what make this bank worthwhile. While BlueVine’s checking is new, the company has been supporting business development for years via loans, lines of credit, and invoice factoring. This bank is one of the finest in the market when it comes to company loans, so banking here might make securing resources much simpler in the future.
When Should You Use a Community Bank or Credit Union?
Many NGOs find it simpler to get sponsorships, grants, and contributions via local credit unions and community banks. Banking locally is also a good opportunity to give back to your community. If a strong banking connection is more essential to you than a countrywide presence, a local bank or credit union may be the best choice.
How We Determined the Best Nonprofit Checking Accounts
We recognize that charitable organizations value simple banking at the lowest feasible cost. We considered banking costs, accessibility, and banking options like bill pay and loans while selecting the accounts on this list. Because many NGOs rely on ethical banking, we considered any community charity activity and financing to be a benefit.
Conclusion
Nonprofits, like any small company, have a variety of banking choices to select from. The best banks for NGOs provide low-cost banking, services that help you pay bills quickly, and assist communities in need, whether you select a conventional bank or a digital bank.
