The term account generally refers to a record-keeping or ledger activity. It has many different applications in the financial industry. In banking, an account refers to an arrangement by which an organization, typically a financial institution such as a bank or credit union, accepts a customer’s financial assets and holds them on behalf of the customer at his or her discretion.
Types of accounts include savings accounts, which are designed to help customers accumulate liquid assets; checking accounts, which make it easier for customers to use liquid assets to pay debts and buy goods and services; and retirement accounts, which allow customers to earn higher interest rates on money saved and invest for old age.
“Account” can also refer to a statement summarizing the record of transactions in the form of credits, debits, accruals, and adjustments that have occurred and have an effect on an asset, equity, liability, or past, present, or future revenue.
Finally, “account” can also refer to a brokerage account, which holds customer assets at a licensed brokerage firm. In this type of account, an investor deposits money or other assets and the broker places trades on behalf of the client.
