How to Open a Nonprofit Bank Account

Get Your EIN Before You Contact a Bank

Every nonprofit needs a federal Employer Identification Number before it can open a bank account, and the IRS issues one at no cost through its online EIN application. Per the SBA, you can open a business bank account once you have your EIN, whether or not you also have a Social Security number tied to the organization. If a service asks you to pay for a basic EIN, you are paying for something the IRS gives away for free. For the full application steps, see our guide on how to get an EIN for a nonprofit.

You Do Not Need 501(c)(3) Approval First

A common misconception is that a nonprofit has to wait for its IRS determination letter before it can open a bank account. That is not the case. A bank account is tied to the organization's legal existence, confirmed by its state articles of incorporation and its EIN, not to its federal tax-exempt status. Many nonprofits open an account shortly after incorporating and before their Form 1023 or Form 1023-EZ application is even filed, which lets the organization start accepting funds and paying initial expenses while the IRS review is pending. See our guide on how to apply for 501(c)(3) tax-exempt status for how that separate timeline works.

The Documents Most Banks Ask For

While every bank's checklist differs slightly, nonprofit account openings generally draw on the same core documents the SBA lists for any business account, adapted to a nonprofit's own paperwork:

• EIN confirmation letter (the IRS's CP 575 notice, or the online confirmation if you applied digitally).
• Articles of incorporation, the formation document filed with your state's Secretary of State or equivalent office, often requested as a certified or stamped copy.
• Bylaws, which describe how the organization is governed and who holds authority to act on its behalf.
• A board resolution authorizing the account, naming which officers or directors can open, sign on, and manage it. Many banks provide their own resolution form for the board to complete and sign rather than accepting a free-form document.
• Government-issued photo ID for every person who will be an authorized signer on the account.

Some banks also ask for a list of current officers and directors, separate from what is named in the resolution, so check your specific bank's checklist before your appointment rather than assuming one list of documents covers every institution.

Hold the Organizational Meeting First

The board resolution authorizing a bank account is typically adopted at the nonprofit's organizational meeting, the same meeting where the board adopts bylaws and elects officers. Documenting this formally, with minutes, gives you a clean paper trail to bring to the bank rather than trying to produce a resolution after the fact. See our guide on how to form a nonprofit corporation for where this step fits among the others.

Choosing Between a Checking and a Savings Account

Most nonprofits open an operating checking account first, for day-to-day expenses and incoming donations, and consider a separate savings or reserve account once the organization has built up a surplus. Keeping restricted grant funds or donor-designated gifts in a separate account, or at least tracked separately in your bookkeeping, makes it easier to show a grantmaker or auditor that restricted money was spent as the donor intended.

Confirm Signer Authority Stays Current

When a signer named on the account leaves the board or changes roles, update the bank's records promptly, which typically requires a new board resolution reflecting the change. Many nonprofits only think to do this when they discover a former board member can still technically authorize a withdrawal, which is a gap worth closing as soon as a board transition happens rather than waiting for it to become a problem.

Keep a Registered Agent on File Throughout

A nonprofit bank account does not replace the separate, ongoing state-law requirement to maintain a registered agent at a physical address in your state of formation. See our guide on does a nonprofit need a registered agent for what that role covers and who can fill it.

Nonprofit Banking Products Can Differ From Standard Business Accounts

Some banks and credit unions offer accounts designed for nonprofits, such as reduced or waived monthly fees for registered 501(c)(3) organizations. Ask specifically about nonprofit account options rather than assuming you will be offered the standard small-business checking product by default.

More Than One Signer Protects the Organization

Naming only one authorized signer on the account, often the founder, can create a single point of failure if that person is unavailable, and it weakens the kind of internal financial controls that grantmakers and auditors look for. Many nonprofits require two signatures above a certain dollar threshold as a basic safeguard.

A Pending 501(c)(3) Application Does Not Change How You Bank

While the IRS reviews your Form 1023 or Form 1023-EZ application, continue operating the account as normal, keeping clear records of income and expenses. If your application is approved within 27 months of your formation date, your exempt status applies retroactively, but your bank account and its transaction history are unaffected either way.

This Is Not Legal or Tax Advice

Specific document requirements vary by bank, and your organization's own governance documents should guide who is authorized to act on its behalf. Talk to a nonprofit accountant about setting up your chart of accounts to separate restricted and unrestricted funds from the start.