Nonprofits generally open a ‘non-interest bearing’ corporate checking account. Smaller nonprofits with limited number of transactions may at times opt for opening an interest bearing account, if permitted by the bank.
Many banks offer special checking accounts for nonprofit organizations. These accounts have the facility for a low or zero minimum balance requirements, free checks/debits paid, free deposits, no or minimal monthly maintenance fee and several other features.
It’s a good idea to check upon a few banks before deciding one for the organization.
Documentation for opening a bank account
The exact documentation needed to open a bank account for a nonprofit organization may vary by state or even by banks within each state. It will also depend on the structure of the nonprofit organization.
Documentation for nonprofit corporations
- Federal Tax ID
- Certificate of Incorporation or Articles of Incorporation
- Corporate Resolution identifying authorized signers if officer names are not listed on articles of incorporation or certificate of incorporation
- IRS ruling letter of tax exemption under the IRC 501C.
If the IRS ruling letter is not obtained, banks generally require submission of a notarized statement from the officers or directors, stating that the organization is exempt from tax reporting under IRC 501C on the organization’s letterhead
Documentation for unincorporated nonprofit associations
- Federal Tax ID
- Corporate name filing document, such as a fictitious name certificate or certificate of trade Name
- Articles of Association and/or bylaws (if available)
- Corporate Resolution identifying authorized signers if not listed on articles of association or bylaws
Sample corporate resolution for opening bank account
Most of the banks prescribe their own formats for the corporate resolution required for opening accounts.