What not-for-profits should look for in a transaction account

We recommend that you discuss your fees and charges and the best account that suits your needs with your local bank. They should be able to explain why you are being charged the fees and/or charges and recommend a more suitable account for your transaction patterns.

These account fees and charges vary between banks but are basically similar in nature. Names and codes may vary.

What are you charged for:

• Monthly Account Fee

  This is a fee that is generally charged for the account every month ostensibly for account keeping. Look for an account that minimises this fee and has way of further reduction by way of a rebate.

• ATM Transactions & Enquiries

While most community groups do not use ATMs for transactions and enquiries note that if you do use these that they generally are lower fees than over the counter and can save substantial amounts. Any enquiry will generally be charged including account balance checks.

This is generally the most expensive fee you will be charged by your bank. This is one area where you should investigate the option of trying to minimise these transactions as much as possible. Look for ways you can get people who pay you to pay by alternative methods such as direct deposit into your account or an electronic transfer.

If deposits are made to your account via other banks (a bank not holding your account ) will incur even higher fees than deposits made at your own bank. These should definitely be avoided and every effort made to use your own bank to transact.

Electronic transactions:

These transaction methods are the lowest fee based methods and can save substantial amounts of money in fees. Look at how your organisation can use these methods. Phone banking is one example that does not generally require any expenditure to but equipment and is simple to use.

• EFTPOS
  Electronic Funds Transfer Point of Sale is an acronym that basically means that you can transact there and then. If for example you charge fees for your service you may want to discuss with your bank how this can save you time and money.
• Internet
  The Internet is increasingly being used for many online banking uses and is a secure way that you can access your account details and make payments. It is a low cost fee environment.
• Direct Debit or Credit
  The use of direct debit or credit can save time and money for community groups. Direct Debit and Credit can be used where you get payments or deposits directly made into your account. This is a sample matter of providing or obtaining the banking details to the account and electronically making the transaction.

  Your bank would be pleased to discuss how this can be implemented.

• Phone Banking
  The use of phone banking has led to a dramatic change in payments of bills. Many people do this in their everyday life to pay electricity, gas or telephone bills. This is one area where community groups can look to save money particularly as a means of bill payment. Phone Banking provides a voice prompted script that takes you through a process to make the payment and is quite easy to follow.

What do you get back?

Banks often have accounts that provide some offset for keeping a credit balance or keeping transactions below a certain level.

Check with your bank to see what options they provide.

Also check:

• What do you need in your account before you get interest or do you get interest at all?
• What rebates do you get on fees or charges and what conditions apply?
• Do you get any free transactions and how many? What happens if you exceed this number?