How To Find the Best Bank for Your Nonprofit

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Workers for a non-profit organization providing community meals.
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Having a trustworthy financial institution is essential for any organization. However, what is the best option for a nonprofit? Should you choose a commercial bank or a credit union? What should you consider when making a choice? Picking a bank for your nonprofit can be overwhelming, and switching institutions can be even harder. To understand how to go about choosing the best bank for your nonprofit, read on for a few tips, as well as the banks we feel are the top contenders.

Key Takeaways

  • Many national and local banks and credit unions offer accounts that can meet the needs of nonprofits.
  • Choosing the right institution for your bank involves multiple factors, including fees, accessibility, and interest rates.
  • When considering a bank or credit union, be sure to ask how much experience they have working with nonprofits.

Commercial Banks, Small Banks, or Credit Unions?

Commercial banks are often the first choice for nonprofits, mainly because of their presence and overall visibility. These banks often have accounts created specifically for nonprofits and can offer exceptional amenities. Because they have a national presence, there are few things these commercial banks don’t deliver in all 50 states.

Smaller banks could be a great option for nonprofits who want to support the community in which they reside. These banks have many of the same amenities of larger, national chains. However, they may not offer as many business-style services, like wire transfers or coin deposits.

Credit unions, on the other hand, operate as not-for-profit institutions themselves. They fund their member benefits and community initiatives with the interest from their accounts and member fees.

How to Choose a Financial Institution

Whether you decide to enroll with a credit union, small bank, or a commercial bank, you’ll need to make sure the institution you choose has everything you need. Here are six critical factors to consider when selecting a financial institution for your nonprofit organization.


A financial institution won't be of much use if it can’t give you what you need when you need it. Before choosing a bank, consider:

  • Does the bank have a physical branch located near you?
  • What kind of customer support do they offer?
  • Do they offer mobile banking?
  • What are their deposit limits?
  • How many people can access the account(s)?
  • What are the rules regarding access?

If you need any specific features such as ATM access, mobile banking, ACH (automated clearing house) payments, foreign currency transactions, insurance coverage, or fraud control, make sure your financial institution can provide those.


Any time you’re choosing a partner to work with long-term, it’s important to consider the cost. Financial institutions use a variety of fee structures, so make sure you get clarity on what your out-of-pocket costs will be. You may be asked to pay a monthly or annual fee. Some banks charge fees for each transaction, or transactions exceeding a certain limit. You may also see processing fees, added-user fees, ATM fees, or other maintenance fees.

Also, be sure to ask about minimum balances. Most institutions have a minimum to open an account, but many also have minimums that balances must exceed. You may face penalties if you don’t comply with those requirements.

Interest Rates

For accounts used for basic operations, such as a business checking account, interest is probably not a big concern. However, if you’re maintaining any savings on behalf of your organization, a good interest rate can make a difference.


If savings rates are important to you, spend some time researching high-interest accounts. The APY that banks and credit unions offer can vary widely from institution to institution.

Credit Products

While the fees and interest should always be an area of focus, make sure you’re considering credit availability. Some nonprofits use lines of credit as part of their strategic budget planning. Some like to have credit available in case of a slow funding period or in case of unforeseen budget complications. If you expect to use a line of credit at any point, find out what your institution requires and what it can offer you.


Like any other aspect of running a successful nonprofit, it helps to work with businesses who have experience with nonprofits. Some financial institutions have a strictly commercial portfolio, or where others have a wide range of expertise. Experience with small businesses can apply to small nonprofits, so look for this marker and ask potential institutions about their work with relevant industries. Find out if they’re capable and ready to support the needs you have that might differ from their commercial clients.


It may also be helpful to request testimonials from current customers. These reviews can provide great insight into how other businesses and organizations feel about the products and services they’re receiving.


As a nonprofit, it’s safe to say that ethics are a high priority, especially when it comes to how your business handles money. Although highly regulated, banking regulations can be cyclical, and there are always loopholes. Make sure to choose a bank that makes its ethical standards known.

As a nonprofit, you should feel confident that the banks you work with are adhering to the same ethical standards to which you hold your organization. If you don’t think that the financial institution you’re considering (or currently use) is ethical, know that there are better options out there.

Nonprofit Banks and Credit Unions

With banks and credit unions serving local, regional, and national audiences, it can be difficult to pick just one. You should be looking for an institution that best serves your organization's needs. Within this category include those that cater to low-activity, low-balance businesses, as well as those banks with relationships similar to large businesses. Be sure to do thorough research and determine your long-term goals before deciding who can best support you. Also, consider a local bank or credit union. Most, though not all, offer similar services to larger commercial banks. Be sure to consider any cost differences that may arise when choosing a smaller bank or credit union, and make sure they abide by the ethics expected of any financial institution.

The Bottom Line

Just like your finances, it’s possible for your nonprofit to have accounts with multiple institutions. While you don’t want to over-complicate your organization’s finances, it’s still perfectly acceptable to choose various banks or credit unions based on the benefits they offer for different needs. One bank may provide more affordable merchant services while another offers higher interest rates for savings accounts, and it’s okay to create a financial plan that gives your business exactly what it needs. The entire process of finding a financial system that works for your nonprofit takes time, but now you’ll have more insight into what you can expect (and deserve) from a bank.

Frequently Asked Questions (FAQs)

What type of bank account is best for a nonprofit organization?

It depends on what you're looking for. A high-yield savings account for businesses may be best if you're looking for a low-risk way to earn interest. If you do frequent transactions, a no-fee checking account with an annual percentage yield may work.

What should a nonprofit look for in a bank?

Some things a nonprofit should consider are what features the bank's accounts offer, if there are accounts tailored to nonprofits, fees, and how much experience the bank has working with nonprofits.

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The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
  1. Young Nonprofit Professionals Network. "How To Choose a Bank Account for Your Nonprofit."

  2. Federal Trade Commission. "Checking Account: Checking Account Fees."

  3. Boston College Law School. "Countercyclical Regulation and Its Challenges," Page 1181.

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