But with so many different options available, it can be hard to decide which one is the best fit for your organization. Fortunately, we’ve done the research and identified the absolute best banks for nonprofits.
In this comprehensive guide, we’ll walk you through the credit unions, national banks, and online banking platforms that uniquely serve nonprofits. 🏦 Whether you’re looking for no-fee checking, tools to give more financial visibility to your board, or features to simplify bookkeeping, we’ll help you make the right choice for your nonprofit’s needs.
What kind of bank account can a nonprofit organization open?
Though nonprofits are tax-exempt, they still conduct business, employ staff, and pay operating expenses. For this reason, the IRS considers a nonprofit a business entity—and like any other for-profit business, a nonprofit is able to open a business checking account. 🤝
Some banks offer business bank accounts specifically for nonprofits. These nonprofit checking accounts might come with special features, like reduced fees or lower minimum balance requirements. 💰 However, nonprofits can open any kind of business checking account, so even if a bank doesn’t have an account labeled specifically for nonprofits, it’s important to consider all your banking options.
For example, Relay (that’s us! 👋) is an online business banking platform built to serve the unique needs of small business owners and nonprofits. With Relay, nonprofits can open 20 individual, no-fee business checking accounts and two savings accounts—that means you can organize donations, grants, and your nonprofit reserves across multiple accounts, without worrying about minimum balance requirements or unexpected fees. 💵
3 types of banks for nonprofits
Nonprofit organizations have three main banking options: credit unions, national banks, and online banking platforms. Each has its own advantages and disadvantages, so let’s take a closer look at each.
🏠 Credit unions
Credit unions are member-owned financial institutions that typically offer lower interest rates on loans and higher savings yields than many big banks. 🤑 Plus, credit union accounts usually come with no monthly fees and better customer service options—perfect for nonprofits looking to get more bang for their buck.
✅ A credit union or local community bank might be right for you if...
You need access to a line of credit or loan and want a lower interest rate
Your nonprofit organization is on the smaller side and conducts most or all operations locally
🌎 National banks
National banks—like Chase and Wells Fargo—are larger institutions that have branches spread out across the country, so if you want to visit a bank in person, this could be a great option for your nonprofit. 🤝 Many national banks also offer services like cash management tools and access to foreign currencies, which are great if your nonprofit operates internationally.
✅ A national bank might be right for your nonprofit if...
Your organization’s board of directors is located in different parts of the country or internationally
You have large monthly transactions that require foreign currency exchange
💻 Online banking platforms
Online banking platforms like Relay offer business checking and saving accounts—plus money management features to help nonprofits organize their spending and gain more control over their finances.
Unlike traditional banks, digital banks aren't weighed down by outdated infrastructure and complex processes. That means they can charge fewer fees and offer conveniences like the ability to open your account completely online. It also means online banking platforms can offer greater levels of security, control, and transparency.
For example, traditional banks rarely offer collaboration features—making your executive director responsible for sending your accountant monthly bank statements and check images. This can slow down bookkeeping and reduce visibility around cash flow, which can be disastrous if your nonprofit is faced with an unexpected audit. 😬
