HOA limit on funds in bank account

Started by DarcyC • 2 replies • 1612 views

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DarcyC (Florida)
Posts: 30

Posted:

Hi, My question is how much money can an HOA in Florida have in the bank account. We are a small community and never have more that 20k or less at one time. WE would like to start having a larger or any reserve,are there some rules that apply to non-profits or do we just have to tax and spend? Thanks

Darcy
treasurer/Secretary

RogerB (Colorado)
Posts: 5,067

Posted:

Darcy,
As much as you want; but you should not put in more in any one account than the amount issured by the FDIC. Keep funds for yearly operations (checking account) and the funds for capital expenditures (reserve account) in separate acccounts. Have a long range (20+ year) plan for the reserve account and place funds there each year to meet the goals in that plan. This will eliminate the need for special assessments.

HOA's incorporated as non profits can file IRS form 1120-H and only pay taxes on those funds received from "outside income" such as interest on the reserve account(s).

GlenL (Ohio)
Posts: 5,491

Posted:

The FDIC limit is per bank, no matter how many accounts you have or if they are opened at different branches. When you get close to the FDIC limit you should look for another bank to start a new account. There was a posting here a couple of years back where a HOA had all their eggs in one basket and the bank failed. They got their FDIC protected money back but the rest was gone.

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