How to Open a Nonprofit Bank Account in South Dakota

What You Need to Know

South Dakota is home to approximately 6,000 registered nonprofits, with major concentrations in Sioux Falls, Rapid City, Aberdeen, and Brookings. The state's nonprofit landscape spans social services, education, healthcare, faith-based organizations, community development, and the arts.

South Dakota's nonprofit sector is supported by 108 FDIC-insured banking institutions, giving organizations strong options for their banking needs. The state's tax environment includes: No personal income tax. No corporate income tax.

Whether you're launching a new nonprofit or looking to switch to a more cost-effective banking solution, understanding South Dakota's specific registration requirements and banking landscape is essential for making informed decisions.

South Dakota Nonprofit Registration Requirements

1. Incorporate with the South Dakota Secretary of State

File Articles of Incorporation (nonprofit) with South Dakota Secretary of State Filing fee: $150. File through the South Dakota Secretary of State. Include required language for tax-exempt status, including a statement of purpose, dissolution clause, and non-distribution provision.

2. Get Your Federal EIN

Apply for an Employer Identification Number (EIN) from the IRS — free, takes minutes online at IRS EIN application.

3. Apply for Federal 501(c)(3) Status

File IRS Form 1023 (or 1023-EZ for smaller organizations). Processing time: 3-6 months. Fee: $600 (Form 1023) or $275 (Form 1023-EZ).

4. Register for South Dakota Tax Exemption

South Dakota has no income tax, so no state income tax exemption is needed. Nonprofits may apply for state sales tax exemption through the Department of Revenue.

5. Register for Charitable Solicitation

South Dakota does not require charitable solicitation registration.

6. Ongoing Reporting Requirements

Annual report to South Dakota Secretary of State required. Due by the first day of the anniversary month of incorporation.

Documents Needed to Open a Nonprofit Bank Account in South Dakota

• •EIN Letter (IRS CP 575 or 147C)
• •Articles of Incorporation (filed with South Dakota Secretary of State)
• •Bylaws (signed by board)
• •Board Resolution authorizing account opening and naming authorized signers
• •Government-issued photo ID for all authorized signers
• •501(c)(3) Determination Letter from the IRS (if available — some banks allow you to open while pending)
• •South Dakota-specific requirements: Charitable solicitation registration confirmation; South Dakota tax exemption certificate (if applicable)

Best Banks for Nonprofits in South Dakota

1. Holdings (Recommended)

• •Monthly fee: $0
• •Minimum balance: $0
• •APY: 1.75% on all balances (checking + savings)
• •FDIC insurance: Up to $3M
• •Nonprofit features: Unlimited sub-accounts for program/fund tracking, built-in accounting with auto-categorization, donation tracking
• •Why it works for South Dakota nonprofits: South Dakota nonprofits managing multiple funding sources can use unlimited sub-accounts to track each grant and program separately. The 1.75% APY ensures your operating reserves are earning real interest instead of sitting idle — every dollar saved on banking fees goes directly to your mission.
• •Open an account →

2. First Dakota National Bank Business Checking

• •Monthly fee: $8 (waived with $2,500)
• •Minimum to open: $100
• •Free transactions: 200/month
• •Branches in South Dakota: 25+
• •Best for: South Dakota businesses wanting local relationship banking with history

3. U.S. Bank Silver Business Checking

• •Monthly fee: $0
• •Minimum to open: $100
• •Free transactions: 125/month
• •Branches in South Dakota: 30+
• •Best for: South Dakota businesses wanting a national bank with no monthly fee

4. First PREMIER Bank Business Checking

• •Monthly fee: $10 (waived with $5,000)
• •Minimum to open: $100
• •Free transactions: 250/month
• •Branches in South Dakota: 30+
• •Best for: Sioux Falls-area businesses needing full-service commercial banking

5. FNBO Free Business Checking

• •Monthly fee: $0
• •Minimum to open: $0
• •Branches in South Dakota: 10+
• •Best for: South Dakota businesses wanting free checking with regional branch access

South Dakota Nonprofit Banking Considerations

State Filing Deadlines

• •Charitable solicitation renewal: Check South Dakota's specific deadline for annual renewal
• •IRS Form 990: Due 5 months and 15 days after fiscal year end
• •Annual/biennial report: File with the South Dakota Secretary of State to maintain active status

Sales Tax Exemption

South Dakota nonprofits with 501(c)(3) status should apply for exemption from the state's sales tax (4.5% state + up to 2% local (6.5% max combined)). Apply through South Dakota's Department of Revenue or equivalent agency. Once approved, you can make tax-exempt purchases for your organization's exempt purpose.

State-Specific Compliance

• •South Dakota does not require charitable solicitation registration.
• •Maintain your corporate registration with the South Dakota Secretary of State.
• •File your IRS Form 990 annually and provide copies to state agencies as required.
• •Keep your South Dakota tax exemption active by maintaining your 501(c)(3) status and filing any required state returns.

South Dakota Nonprofit Resources

• •South Dakota Nonprofit Network
• •South Dakota Secretary of State — Business Services
• •South Dakota Department of Revenue
• •South Dakota Secretary of State

FAQ

Do nonprofits need a separate bank account in South Dakota?

Yes. While not always legally required, a dedicated nonprofit bank account is essential for maintaining your tax-exempt status, satisfying donor expectations, and meeting South Dakota reporting requirements. Commingling personal and organizational funds can jeopardize your 501(c)(3) status.

Can a South Dakota nonprofit use a personal bank account?

Technically possible in early stages, but strongly discouraged. South Dakota's charitable solicitation requirements expect organizational funds to be held in a dedicated account. Most grantmakers and institutional donors require it.

What fees should South Dakota nonprofits watch for?

Monthly maintenance fees, minimum balance requirements, transaction limits, and wire transfer fees are the most common hidden costs. Holdings charges $0 for all of these. Traditional banks in South Dakota typically charge $10-30/month plus per-transaction fees after a limit.

How long does it take to open a nonprofit bank account in South Dakota?

With Holdings: same day (online application, no branch visit). With traditional banks: typically 1-2 weeks including branch appointments and document review.

Does a South Dakota nonprofit need 501(c)(3) status to open a bank account?

No. You can open a nonprofit bank account with your EIN and Articles of Incorporation before receiving your 501(c)(3) determination letter. Holdings and most banks allow this.