Should the management company keep the interest on our bank accounts?

This is the least visible money in community management and, at scale, some of the largest. It reaches a Management Company in two forms, and Boards typically know about neither.

The first is interest on association operating funds held in accounts the company controls. The second, and bigger one, is the bank earnings credit — banks that specialize in association management pay the company for deposit volume, sometimes in cash, sometimes as free banking services, sometimes as a per-account payment. A firm holding a hundred million dollars of association money across its portfolio is a substantial customer to a bank, and it gets paid like one.

None of this is illegal. Several states require disclosure of it, and a handful require that interest on association funds follow the association. Practice varies enormously.

Ask: are our accounts in our name and our tax ID. Who receives interest earned on them. Do you receive earnings credits, deposit-based compensation, or free services from the bank where our funds are held. Get the answer in the proposal, not in conversation. A company that answers it plainly is telling you something about how it operates generally.