HOA Banking: How to Choose the Right Bank and Account

HOA banking is one of those topics that seems simple until something goes wrong. A reserve account titled in the former treasurer’s name when that person leaves the board. A reserve fund over $250,000 with no FDIC coverage above the limit. A single-signer account where one board member can unilaterally move reserve money. Each of these situations creates real financial and legal exposure—and all of them are preventable with the right account structure from the start.

Why HOAs Need Separate Bank Accounts

Most state HOA and condo statutes require that reserve funds be maintained in separate accounts from operating funds. This is not optional in most jurisdictions. Commingling—depositing assessment income into a single account that funds both daily operations and holds the reserve balance—is a statutory violation in many states and a material finding in any HOA audit.

The reasons are practical as well as legal:

Visibility. Two separate accounts on the balance sheet make it immediately clear how much is in each fund. A single combined account obscures whether reserves are intact.

Protection. If the operating account has insufficient funds to cover a vendor payment and the bank allows an overdraft, a combined account dips into reserve money. A separate reserve account cannot be accidentally spent on operations.

Audit trail. Separate accounts create unambiguous documentation of every reserve deposit and withdrawal. Auditors expect it. Lenders processing Fannie Mae condo questionnaires look for it.

Compliance. Your state statute almost certainly requires it. Review your state’s community association act and your governing documents.

The minimum structure: one operating checking account and one reserve savings or investment account. Both titled in the association’s legal name.

Choosing the Right Bank

Not every bank is set up to serve HOA clients well. The features that matter for HOAs are different from those that matter for small businesses or individual consumers.

Key evaluation criteria:

IntraFi Network Deposits availability. If your reserve fund exceeds $250,000, you need a way to extend FDIC coverage. IntraFi (formerly CDARS for CDs and ICS for money market-style demand deposits) is the standard solution. Your bank should offer access to IntraFi through their own membership in the network. Ask specifically: “Do you offer IntraFi Network Deposits or a similar program for FDIC coverage above $250,000?”

Dual-signature support. The bank must be able to enforce a dual-signature requirement on the reserve account—meaning two authorized signers must approve any withdrawal above a set threshold. Some online banks and fintech platforms do not support this. Traditional banks with branch operations are more reliable here.

Online banking with HOA-appropriate access levels. The treasurer needs full visibility into both accounts. The board needs view-only access for oversight. Tiered user access (read-only vs. full transactional) is useful but not universal.

HOA-specific account titling. The bank should allow accounts to be titled correctly in the association’s legal name with separate designations for operating and reserve purposes.

ACH collection capability. If your community collects assessments via ACH auto-pay, your bank should support ACH origination or work with a payment processor that does. Assessment ACH collection dramatically reduces delinquency compared to check-based collection.

Competitive interest on reserve accounts. Reserve funds should earn interest. Money market accounts, high-yield savings, or IntraFi CDs on longer-horizon reserve amounts are common choices. Check the current rate against comparable products—a large reserve fund at 0.05% APY when money market rates are 4%+ is leaving real money on the table.

FDIC Coverage for Large Reserve Funds

Standard FDIC insurance covers up to $250,000 per depositor per bank per ownership category. An HOA is treated as a single depositor for FDIC purposes. A reserve fund of $400,000 held at a single bank has $150,000 in uninsured exposure.

For HOAs with reserve funds above $250,000—which includes many mid-size to larger communities—IntraFi Network Deposits (intrafi.com) is the standard solution. Here is how it works:

1. Your bank places your deposit into the IntraFi network
2. The deposit is divided into increments below $250,000
3. Each increment is held at a different member bank
4. Each sub-$250,000 increment at each member bank carries full FDIC coverage
5. You see a single account statement from your primary bank

Effective FDIC coverage through IntraFi can extend to several million dollars while the depositor maintains a single banking relationship. For HOAs with reserve funds of $500,000 to $5 million, this is the correct solution.

Banks that offer IntraFi access typically do not charge additional fees for the program—the participating banks share the economics through the network itself.

Alternative approaches:

• Spread funds across multiple banks with separate $250,000 accounts at each (more administrative burden)
• US Treasury money market funds (FDIC doesn’t apply, but Treasury-backed funds have their own safety characteristics—consult a financial advisor)
• Short-duration Treasury ladders or FDIC-insured CDs at multiple institutions

Setting Up Dual Signature Requirements

Dual signature requirements are the single most important internal control for HOA reserve accounts. The requirement should be established in a board resolution and communicated to the bank in writing.

What to specify in the board resolution:

• The reserve account is subject to dual authorization for any withdrawal, check, or transfer
• Two authorized signers must approve any transaction above $[threshold] (commonly $1,000–$2,500 for operating, all transactions for reserve)
• Current authorized signers (typically the treasurer plus the board president, or two officers)
• Process for updating authorized signers when board officers change

What to tell the bank:

• Provide the board resolution
• Request the bank flag the account as requiring dual authorization
• Test it: attempt a single-signer transaction and confirm the bank rejects it

Update authorized signers promptly. Every time a board officer changes, update the bank’s authorized signer list before the outgoing officer’s access is removed. A gap in authorized signers—a period when nobody can legally transact on the account—is a problem. Overlapping transition periods are common and appropriate.

Account Titling and Legal Name Requirements

All HOA accounts must be titled in the association’s legal name, not in any individual’s name.

Correct: “Sunridge Homeowners Association, Inc. – Operating Account” Incorrect: “Jane Smith, Treasurer, Sunridge HOA”

Accounts in an individual’s name create problems when that person leaves the board. Banking institutions require the listed account holder to authorize access changes. If the former treasurer is uncooperative, recovering account control can require a court order.

The association’s Employer Identification Number (EIN) should be the tax ID on all accounts—not an individual’s Social Security Number. The EIN is obtained from the IRS (Form SS-4) and remains with the association regardless of board composition.

Banks with HOA Banking Divisions

Several institutions market specifically to community association clients and offer features tailored to HOA needs. This is not an exhaustive list and not an endorsement, but it represents the type of institutions worth evaluating:

Alliance Association Bank (division of Western Alliance Bank): community association-focused products, IntraFi access, ACH collection.

Axos Bank: online-first institution with HOA checking and savings products, competitive rates on reserve accounts.

First Foundation Bank: California-based with community association banking focus.

National bank HOA divisions: Bank of America, Wells Fargo, and several regional banks have dedicated HOA banking teams in major markets, typically with access to IntraFi programs and ACH collection support.

When evaluating any bank, ask these specific questions:

1. Do you offer IntraFi Network Deposits?
2. Can you enforce dual-signature requirements on specific accounts?
3. Do you support HOA-specific account titling?
4. What is your current rate on HOA money market or savings accounts?
5. Do you offer ACH assessment collection integration?

How BoardStack Connects to Your Bank Accounts

We built BoardStack to connect to your HOA bank accounts via read-only bank feed, pulling transactions automatically for reconciliation rather than requiring manual entry. The platform maps transactions to the correct fund (operating vs. reserve) based on the account they hit—maintaining the fund separation at the accounting level that mirrors your separate bank accounts.

When the board reviews monthly financials in BoardStack, the reserve account balance shown in the software matches the bank balance, because both are pulled from the same source. There is no “did someone forget to reconcile?” question.

BoardStack starts at $20/month for communities under 50 homes. Start a 30-day free trial—no credit card, no per-unit fees. The fiduciary duty checklist is a useful companion for confirming your banking controls are in order.

DEFINITION

FDIC Insurance

Federal Deposit Insurance Corporation coverage that protects depositors for up to $250,000 per depositor, per bank, per ownership category if a bank fails.

DEFINITION

IntraFi Network Deposits

Formerly known as CDARS (for CDs) and ICS (for demand deposits), IntraFi is a network that allows banks to spread large deposits across multiple member institutions, each carrying full FDIC coverage, while the customer maintains a single bank relationship.

DEFINITION

Dual Signature Requirement

A bank account control requiring two authorized signers on checks or wire transfers above a certain threshold—an internal control designed to prevent unauthorized withdrawals from the reserve fund.

DEFINITION

Sweep Account

A bank account arrangement where excess cash above a set threshold is automatically moved into a higher-yield instrument (money market fund, overnight repo) to earn interest while keeping funds accessible.