How to Set Up A Bank Account For A Youth Sports Team
Youth sports organizations across the country, regardless of sport, need low-cost checking accounts to run their teams effectively. A bank account is important to a youth sports team because it is a hub for the organization’s finances, which enables teams to collect payments, pay for expenses, and much more.
It is essential that the team bank account is NOT a personal bank account. It's important to not commingle team money with your own so that there is a clear distinction in ownership for tax and liability reasons. Here’s what you need to set up an account in the team’s name, rather than an individual’s name.
What You Need To Open a Team Bank Account
We suggest that you check with banks in your area for specific requirements, but we have found that most banks require four things to open a bank account in the team’s name:
A Minimum Deposit
A Tax ID number/ Employer Identification Number (EIN) for the team
2 Forms of Identification & Social Security Number for Each Person on the account
A “Meeting Minutes” document
Most banks that we talked to required a minimum deposit ranging from $25 to $100 to open a new bank account. Most of the time, this is due at the time of creating the account, though some banks will allow you 30 or 60 days to make the initial deposit.
Tax ID Number/EIN
A Tax ID, also known as an Employee Identification Number (EIN) is required by banks in order to open an account for a team or club that is distinct from you personally. The EIN is a unique number that identifies the organization to the Internal Revenue Service. To apply for an EIN, complete an "SS-4" application through the Internal Revenue Service. Click here to request an EIN through the IRS website.
IDs & Social Security Numbers
If you are going into a local branch to create your account, each member of the organization who will be on the account will need to be present and bring two forms of identification. Most commonly, one of the forms of identification will need to have a photo, such as a driver’s license or passport. Each member will also need to know their social security number as this will be a part of the account paperwork. Check with the branch to confirm acceptable forms of ID.
If you find a bank willing to set up the account over the phone, the person opening the account via phone will need to gather information from the others who will be on the account. Typically, this information will include their full name, social security number, date of birth, and current street address.
A Meeting Minutes document is often required as proof of the organization’s existence. The document should include the team name, as well as the names of the team’s officers which will sign for the bank account. Some banks will accept the EIN paperwork in place of a Meeting Minutes document.
What To Look For In A Bank Account For Your Club
A good team bank account should have low fees and offer all of the perks of a normal bank account, including features such as: a debit card, online banking, checks, and mobile deposits.
Because group bank accounts often fall under the “small business” umbrella for banks, it’s important to get a thorough understanding of the features of the bank account before you apply.
Make sure to find an account that will allow you to make all of the transactions that you need to process on a monthly basis, as some bank accounts have limits on cash deposits or the total number of transactions.
Most banks will charge a small monthly maintenance fee for a group account, but offer to waive it if certain conditions are met. Some of these conditions may include keeping a minimum monthly balance in the account, or using the account’s debit card a certain number of times. This can be difficult for youth sports teams, as bank activity differs greatly between in-season and out-of-season months. It’s worth having the conversation with your bank to find the best way to avoid these fees.
Using Your Team Bank Account
Once your team’s bank account is set up, you can immediately start to collect checks in the team’s name and pay out expenses from the team’s account. We recommend that you read our Guide to Being a Youth Sports Treasurer for more information on keeping a budget, tracking expenses, and all of the other important steps to effectively handle your team’s money.
Here at Groundwork, we make collecting team payments easy by giving parents an easy way to pay online. This money is then automatically deposited into your team bank account, eliminating the need for constant trips to the bank.
Interested in Groundwork? Head over to our full website to learn more and/or schedule a demo.