QUESTION AND ANSWERS ABOUT CHECKING ACCOUNTS

Both the New Hampshire non-profit organization that will receive any state or federal funding and that promotes the charter school, and the authorized chartered public school itself, once authorized to exist, will need to set up bank accounts and need banking services.  

Readiness for establishing bank accounts and a bank relationship is a first step enabling the founding organization or the actual charter school to perform essential business functions.  

Q1.  What information should I have before approaching a bank to open a checking account? 

A1.  Be prepared to provide this information:

• a copy of your charter

• estimated number of employees during start-up year

• cash available for an initial deposit

• copy of your start-up or other grant award

• estimated number of checks to be written monthly. 

Q2.  What paperwork will I need to open a checking account? 

A2.  A bank will require the charter school opening its account to provide:

• federal Employer Identification Number

• charter document establishing the organization’s  right to be an entity (either the non-profit papers submitted to the Secretary of State or the charter awarded from the State Board of Education,

• copy non-profit filing papers with the state or IRS, if applicable,

• personal information for each person having check-writing authority or signing to set up the account, including SSN, driver’s license number and expiration date, address and date of birth.

Q3.  Who has signing authority on the checking account?

 A3.  The Board of Trustees vote to determine who has signing authority, often choosing a board member until the school is more established. If the charter school board has a "treasurer," the treasurer usually is bonded and has check-writing authority. A charter school may want to have two people authorized in case the treasurer is out of commission. Consult the CPA working with you. Click Here for more info on setting up financial operations.

Q4.  Will the bank open an account if all of the signers are not present?

 A4.  Most banks will open the account with only one individual present, establishing this individual as the signing authority.  The bank will then issue signature cards for each additional signer.  Upon return of these completed cards, the additional signers will be added to the account.  It is important to check on your chosen bank’s requirements,, as some banks do require the presence of each signer to open the account. 

Q5.  How do I show Board approval to establish a checking account? 

A5.  Not every bank requires proof of Board authorization for setting up an account. For a bank that does require such proof, the bank will issue a form to be completed which requires such items as names and offices of board members, the date the board voted to  open a checking account in the name of the organization with this particular bank, the person(s) authorized by a vote of the board to have check signing authority.  To prepare, then, you must: 1) check what, if anything, the bank wants for information, 2) make sure the board takes a vote on the information the bank will require, and 3) make sure the board discusses how the account will be managed and who will have authority to sign checks releasing money from the account.  

The non-profit should have good financial management, but the charter school has statutory requirements for how money is handled and managed (reference book on setting up financial accounts).

Q6.  How much money is required to open a checking account?

A6.  Call the bank to find out. You may need $100, but many banks will take a lesser opening deposit.  Some banks require a greater opening deposit. 

Q7.  How do I choose the right bank?

A7.  Once established and flourishing, your charter school will have several hundred thousand dollars. This can be a good business for banks to have--a school. Shop around for the best and most cost-effective banking package.  Below are some questions to consider:

• Is the bank familiar with the unique needs and requirements of a small school with grants and tuitions and payroll to meet monthly?

• Do you feel comfortable with the level of service being offered?

• Is a minimum balance required?

• How many checks can be written for free each month?

• What is the minimum opening deposit?

• Are there other fees?

• Will the bank be willing to give you a line of credit so you can meet payroll is your grant funding is delayed?

• Does the bank offer free checking for small public organizations?

• Are there any interest-bearing ways to hold your balances?