Not-For-Profit Bank Accounts

Features to compare when looking for a not-for-profit bank account, right here with Savvy.

Last updated on April 26th, 2022 at 02:59 pm by Cate Cook

Compare bank accounts for your charity organisation

If you’ve been tasked with opening a bank account for a charity or not-for-profit organisation, you’re probably wondering how to get the best deal.  Savvy can help you find the best bank account by giving you clear and easy-to-understand comparison information about the various accounts available.  Get the best account deal for your charity today with us.

What is a not-for-profit bank account?

A not-for-profit (NFP) bank account is an account set up to manage the funds of a charity or NFP organisation.  Such accounts can either be transaction accounts, savings accounts or a hybrid of the two which offers both savings and transactions features in the one account.  The main feature of NFP accounts is that they’re almost always fee-free and offer unlimited transactions without charge. 

Savvy compares financial products to help you find the one which best suits your particular needs.  Use Savvy’s free comparison service to find the best NFP bank account for your organisation.

What features should I look for in my not-for-profit bank account?

First of all, check the eligibility criteria for the bank accounts in question and check that your organisation fits the criteria.  Some accounts only allow NFP charity organisations, while others welcome schools, community and sporting clubs, churches and some government-funded charitable organisations. Make sure your organisation fits the bill for all the particular accounts you’re comparing.

Next, think about what you need the bank account to do for your organisation. Is it primarily to manage donations or subscriptions and to pay bills?  If so, a transaction or everyday account may be the most suitable type of account.  Check that there aren’t any account-keeping fees, transaction fees or costs to issue debit cards linked to the account. 

Some banks offer up to ten free debit cards which can be linked to the NFP transaction account.  Unlike personal bank accounts, the people who are issued with debit cards (or a security token or USB) for charity bank accounts don’t need to be named account holders.  Usually, a bank or financial institution will just need to see a copy of the official minutes of the organisation naming those people who should have debit card or security token access to the organisation’s funds.

However, if your NFP primarily needs somewhere to park donated funds to earn interest, look at either high-interest savings accounts or term deposits, depending on whether your organisation will need to access the funds regularly.  If you can park your organisation’s savings for several months without touching them, a term deposit for three, six, nine or 12 months may offer you the highest interest rate. Savvy compares high-interest savings accounts so you can see which bank account may offer the best return on your NFP’s funds.

If you have funds you wish to earn interest on but also need to be able to access them to pay for goods or services, an ‘all-in-one’ charity account may be your best option.  These accounts offer all the convenience of a transaction account, but also offer moderate interest on the balance in your account. Don’t expect your organisation’s nest egg to earn a fortune in interest, though, as the rates offered for these ‘hybrid’ accounts are usually very modest.

How are charity accounts or charity/community savings account different?

There is another type of account which is frequently confused with a NFP bank account.  These are known as ‘charity accounts’ or ‘charity/community savings accounts’ and are savings accounts opened by an individual (or trust, company or group) which earn interest.  The account owners then nominate a charity to which the interest earned is donated on a regular basis.  Such accounts have frequently been used in the past to ensure a regular donation is made to a particular volunteer fire service or animal rescue group.  By opening a charity bank account and donating all interest to the named benefactor, no tax is payable on any interest earned and the named charity or NFP organisation gains an ongoing tax-free income.

More frequently asked questions about not-for-profit bank accounts

Do all banks offer not-for-profit bank accounts in Australia?

No – whilst almost all banks have free bank accounts for children, students and pensioners, not all banks or financial institutions have the same facilities for NFP organisations.  Online building societies, credit unions and banks tend to offer the highest interest rates to charities, so it may be worth comparing accounts from these institutions to find the best one for your organisation.

Can I claim the donations I make through my charity savings bank account as a tax deduction?

Yes – as long as you have a receipt for the money you’ve donated, and the organisation you’ve donated to is a registered Deductible Gift Recipient (DGR), you can claim that donation as a tax deduction.  

What is the ACNC and what powers does it have?

The Australian Charities and Not-for-Profits Commission (ACNC) was established in 2012 to protect and support NFP organisations and charities.  All organisations claiming DGR status must be registered with the ACNC to claim they are a ‘registered charity.’  

My registered not-for-profit organisation has a revenue of less than $100,000. Do I have to get our financial records and bank account audited?

No – charities with a revenue of less than $250,000 per year do not have to have their accounts audited.  Medium-sized organisations, which are classified as having a revenue of over $250,000 but under $1 million per year, can either submit financial records which have been reviewed or audited.  Large charities with revenues of over $1 million must have their accounts audited by an ACNC-approved auditor.

Do the requirements for not-for-profit organisations to produce financial reports vary from state to state in Australia?

Yes, they do – whilst all charities fall under the jurisdiction of the ACNC, there are also state government regulations which may govern the formation, conduct and accountability of charity organisations.  Check with both your state government and the ACNC to find out which regulations may apply to your particular NFP organisation or charity.

What happens to the money if a charity’s bank account is lost when treasurers or office bearers change or move on?

If a small charity dissolves or becomes inactive, its bank account may sit unused for several years.  If there hasn’t been any activity in that account for seven years, it will be declared lost and the funds transferred to the Commonwealth of Australia Consolidated Revenue Fund, which is administered by the Australian Securities and Investments Commission (ASIC).  Lost not-for-profit bank accounts can be searched for on ASIC’s unclaimed money database.