If you're managing a charity or community group, a bank account designed for charities can help you manage donations, membership fees and other income. These work in the same way as a standard bank account or business account, except they're able to be opened by community groups and charities and give multiple people access to the account.
Some business bank accounts will allow charities and community groups to open an account if they have a registered ABN. However, there's also some accounts available specifically for non-profits and communities.
We've researched some of the options available for charities to open a bank account:
A not-for-profit account is customised to meet the banking needs of organisations who collect those donations.
These types of savings accounts provide all of the benefits of a typical savings account, but with special features. For instance, they may allow a number of people who are responsible for keeping track of the finances for the not-for-profit group to access the account.
Not all banks or financial institutions offer accounts for charities and not for profit organisations.
However, a charity's Responsible People have duties to ensure that the charity's financial affairs are managed responsibly. This means ensuring all the funds you collect are managed effectively and responsibly.
Legally, you are not required to open a charity account. However doing so will create a much more professional and streamlined process for managing your accounts and tax obligations.
Note that large charities with revenues of over $1 million must have their accounts audited by an ACNC-approved auditor each year, and in this instance, purpose-created charity accounts are advisable. Charities that earn revenue of less than $250,000 per year do not have to have their accounts audited, and medium-sized organisations (revenue of $250,000 to $1 million per year) can choose to either submit financial records which have been reviewed or audited.
Some banks offer what's called a community savings account, sometimes called a charity savings account. This can be confusing, but these aren't actually designed for charities to use.
Instead, these accounts are designed for everyday customers looking for an easy way to donate the interest their account earns to a charity of their choice.
These accounts allow you to choose a charity, then the bank will automatically make donations to the charity from your account each month. When you open a charity bank account and donate all interest to the named charity, no tax is payable on any interest earned.
The Bankwest Easy Saver account offers a bonus rate for the first 4 months, then an ongoing standard variable rate with no conditions to meet.
Check out out review of the Bank of Queensland Simple Saver Account.
The Bank of Queensland Future Saver Account has a high ongoing bonus rate on balances up to $50,000 for customers under 35.
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