Others may charge higher fees because they offer services which smaller nonprofits are unlikely to take advantage of. Terms vary widely, but a short discussion with a board member, banker, financial advisor, or broker should help you sort it out quickly. Some donors, especially government agencies, require that interest earned on their monies be returned to them. When considering an interest-bearing account you should consider the net cost incurred from the combination of interest and other fees, which may include monthly service charges, per check fees, electronic transaction charges, and other fees resulting from insufficient funds and returned checks. An interest-bearing account is advantageous only if your average balance is sufficient to avoid fees, such fees are waived automatically for you, or the interest generated from your balance is consistently greater than the fees charged to maintain the account.
Banks offer a variety of checking and savings instruments.
Typically higher interest is paid on those accounts requiring higher minimum balances. Daily Balance Ask whether fees are computed on an average versus minimum daily balance. On a minimum daily balance basis, you are penalized for falling below the required minimum balance for even one day, regardless of your balance for the month. You might also look into a sweep account with your bank. In this arrangement, you maintain a predetermined amount in your checking account.