How Do I Pick a Savings Account?
When choosing a savings account for your nonprofit, there are several important factors to consider to ensure it aligns with your organization's financial goals and needs. Here are some things we suggest you consider.
Talk to Your Bank About a Nonprofit Savings Account
First off, work smarter not harder. If time resources are limited, the path of least resistance may be to open a nonprofit savings account at a bank where you have your nonprofit checking account.
That said, you want to make sure you gather the necessary information about a savings account before you sign up for one. For this reason, we recommend scheduling an appointment with your banker to ask questions.
If your bank has an app, you may be able to schedule an in-person visit or phone call through the app itself. If your bank does not have an app, you will likely need to call you bank to schedule an appointment.
Here are some questions you can ask your banker to make sure you understand the ins and outs of your nonprofit savings account:
Savings Account Options and Features:
What types of savings accounts are available for nonprofits?
Are there any special savings accounts designed specifically for nonprofit organizations?
Fees and Charges:
What are the fees associated with the savings account (monthly maintenance fees, minimum balance fees, transaction fees, etc.)?
Are there any ways to waive these fees? - Don’t skip this question! Especially if you’ve been with your bank for sometime. You’d be surprised how accommodating they can be in order to keep your business.
Interest Rates and Earnings:
What is the current interest rate for the savings account?
How often is interest compounded and credited to the account?
Minimum Requirements:
Is there a minimum opening deposit required?
Are there any minimum balance requirements to maintain the account?
Accessibility and Transactions:
What is the process for withdrawing funds from the account?
Are there any limits on the number of transactions per month?
Can the account be accessed online or via mobile banking?
Security and Insurance:
Is the account FDIC insured? If so, what is the coverage limit?
What security measures are in place to protect the account?
Additional Services:
Are there any additional services that come with the account (e.g., financial advising, account management tools)?
Can the savings account be linked to other accounts, such as checking accounts, for easier fund transfers?
Support and Assistance:
Is there a dedicated customer service line or representative for nonprofits?
What support is available for managing the account and resolving any issues?
Terms and Conditions:
Are there any specific terms and conditions that apply to nonprofit savings accounts?
Are there any restrictions on how the funds can be used or accessed?
Future Needs and Flexibility:
Can the account grow with the organization, accommodating increased deposits and transactions?
What options are available if the organization’s needs change in the future (e.g., moving to a higher-yield savings account or other financial products)?
The More You Know About Nonprofit Savings Accounts
Some banks offer accounts specifically designed for nonprofits. These accounts might come with benefits like lower fees, higher interest rates, or additional services tailored to nonprofit needs. Look for other additional perks, such as free check-writing, free wire transfers, or discounts on other bank services. These can add value and convenience for your nonprofit too.
Review the account for any fees or charges, such as monthly maintenance fees, transaction fees, or minimum balance requirements. Opt for accounts with minimal or no fees to maximize your savings. Make sure to check the minimum balance requirements for the account, and ensure that your organization can maintain the required balance to avoid fees and maximize interest earnings.
Consider how easily you can access the funds when needed. Some accounts may have restrictions on the number of withdrawals or transfers you can make per month. If you need frequent access to your funds, ensure the account terms allow for that without penalties.
Ensure the savings account is FDIC-insured (or similarly insured if you are outside the United States) to protect your funds up to the maximum limit allowed by law.
Choose a bank or credit union with a good reputation and strong customer service. It’s also helpful if the institution offers additional services that could benefit your nonprofit, such as business checking accounts, loans, or financial advice.
Look for accounts that offer online and mobile banking options. This can make managing your funds more convenient and efficient.
Benefits of Nonprofit Savings Accounts
The idea of building a savings account for your nonprofit can feel daunting, especially when funds are already limited. We highly encourage you to start the practice of saving now in whatever capacity feels doable for your organization. If you’re unsure of how to start saving for your organization, check out our additional blogs about nonprofit savings:
By doing the work to set up a savings account and begin making manageable transfers, it will set you up to be able to make those larger deposits when the cash flow and fundraising is going well.
Just imagine arriving at work each day knowing that if your nonprofit experiences a major hurdle in fundraising, it can sustain itself for a few months while you focus your energy on reaching out to your fundraising network. By reading this blog post and starting to think about building a savings account you are taking a big step towards financial wellness for your nonprofit!
If you are still learning about nonprofit financials, make sure to check out our blog posts on How to Read Nonprofit Financial Statements as well as Everything You Need to Know About Nonprofit Taxes.
Thank you for being here!
