DEFINITION of 'Account'

1. An arrangement by which an organization accepts a customer's financial assets and holds them on behalf of the customer at his or her discretion.

2. A statement summarizing the record of transactions in the form of credits, debits, accruals and adjustments that have occurred and have an affect on an asset, equity, liability or past, present or future revenue.

3. A relaying of happenings from one party to another.


1. The Knights Templar were the first to hold assets on the behalf of others and make loans on those assets. As such the Knights Templar are credited with creating the foundations of today's banking system. Accounts were first created so that people could borrow to travel to the Holy Land, and hold and amass wealth that was often stolen during the Crusades.

2. This statement of transactions is the record of the growth and development, or shrinking and amortization of almost anything quantifiable.

3. An account is the passing on of information for the purpose of explanation.

  1. Frozen Account

    An account to which no withdrawals or purchases can be charged. ...
  2. Checking Account

    A transactional deposit account held at a financial institution ...
  3. Account Balance

    1. The amount of money in a financial repository, such as a checking ...
  4. Margin Account

    A brokerage account in which the broker lends the customer cash ...
  5. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to ...
  6. Vostro Account

    The account that a correspondent bank, usually located in the ...
Related Articles
  1. Economics

    What Is Money?

    It's a part of everyone's life, and we all want it, but do you know how it gains value and how it is created?
  2. Options & Futures

    Advanced Financial Statement Analysis

    Learn what it means to do your homework on a company's performance and reporting practices before investing.
  3. Stock Analysis

    JP Morgan Chase & Co. Vs. Bank of America Stock

    Examine two of the big four U.S. money center banks, Bank of America Corporation and JPMorgan Chase & Company, by comparing important equity evaluation metrics.
  4. Professionals

    Career Advice: Investment Banking Vs. Commercial Banking

    Read an in-depth review of the differences between a career in investment banking and a career in commercial banking, including how to decide between them.
  5. Economics

    What is a Loan Loss Provision?

    Banks set aside loan loss provisions to cover losses from bad loans.
  6. Stock Analysis

    Who Are Wells Fargo’s Main Competitors?

    Explore information on the main competitors of Wells Fargo, the other three of the "big four" U.S. banks of Citigroup, JPMorgan Chase and Bank of America.
  7. Economics

    Understanding Retail Banking

    Retail banking refers to the mass-marketed, consumer-oriented products and services offered by the local branch of the commercial bank.
  8. Mutual Funds & ETFs

    ETF Analysis: PowerShares KBW Bank

    Consider an examination and analysis of the PowerShares KBW Bank Portfolio ETF, considered one of the primary financial sector ETFs.
  9. Credit & Loans

    Refinance Vs. Debt Restructuring: What's Best For Your Credit Score?

    Discover key differences between refinancing and restructuring debt in regard to terms, the negotiation process and effect on credit scores.
  10. Investing Basics

    Explaining Rehypothecation

    Rehypothecation occurs when an asset used as collateral for one party is reused in another transaction.
  1. How does investment banking differ from commercial banking?

    Investment banking and commercial banking are two primary segments of the banking industry. Investment banks facilitate the ... Read Full Answer >>
  2. Why do commercial banks borrow from the Federal Reserve?

    Commercial banks borrow from the Federal Reserve primarily to meet reserve requirements when their cash on hand is low before ... Read Full Answer >>
  3. How does a bank determine what my discretionary income is when making a loan decision?

    Discretionary income is the money left over from your gross income each month after taking out taxes and paying for necessities. ... Read Full Answer >>
  4. What role does a correspondent bank play in an international transaction?

    A correspondent bank is most typically used in international buy, sell or money transfer transactions to facilitate foreign ... Read Full Answer >>
  5. What is the difference between a correspondent bank and intermediary bank?

    Correspondent and intermediary banks serve as third-party banks that coordinate with beneficiary banks to facilitate international ... Read Full Answer >>
  6. What net interest margin is typical for a bank?

    In the United States, the average net interest margin for banks was 3.03% in the first quarter of 2015. However, this was ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Gross Profit

    A company's total revenue (equivalent to total sales) minus the cost of goods sold. Gross profit is the profit a company ...
  2. Revenue

    The amount of money that a company actually receives during a specific period, including discounts and deductions for returned ...
  3. Normal Profit

    An economic condition occurring when the difference between a firm’s total revenue and total cost is equal to zero.
  4. Operating Cost

    Expenses associated with the maintenance and administration of a business on a day-to-day basis.
  5. Cost Of Funds

    The interest rate paid by financial institutions for the funds that they deploy in their business. The cost of funds is one ...
  6. Cost Accounting

    A type of accounting process that aims to capture a company's costs of production by assessing the input costs of each step ...
Trading Center
You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!