Lifeline Account


DEFINITION of 'Lifeline Account'

A streamlined checking or savings account designed for low-income customers. These accounts will usually have low balance requirements and no monthly fees, and are offered by large banking institutions as a way to offer basic banking services to the broad public. Some states mandate that lifeline accounts be available within the state.

Basic features such as check writing will be available, but will typically be limited by a monthly quota. Other electronic services may also be limited unless the account holder pays additional fees.

BREAKING DOWN 'Lifeline Account'

Lifeline accounts aim to bring all members of a society into the economy by encouraging saving and long-term investing. Low-income citizens are often ignored in the economy because they don't have a lot of disposable income, but by fostering their long-term financial health, they can become bigger contributors down the road.

  1. Electronic Check

    A form of payment made via the internet that is designed to perform ...
  2. Regressive Tax

    A tax that takes a larger percentage from low-income people than ...
  3. Microfinance

    A type of banking service that is provided to unemployed or low-income ...
  4. Checking Account

    A transactional deposit account held at a financial institution ...
  5. Microsavings

    A branch of microfinance, consisting of a small deposit account ...
  6. Bank Deposits

    Money placed into a banking institution for safekeeping. Bank ...
Related Articles
  1. Credit & Loans

    Credit, Debit And Charge: Sizing Up The Cards In Your Wallet

    Not all plastic is equal! Learn the difference between the three kinds, and how each can affect your finances.
  2. Entrepreneurship

    Microfinance: What It Is And How To Get Involved

    This growing industry is full of opportunities for the socially conscious investor.
  3. Insurance

    Your First Checking Account

    This owner's manual will show you what to expect from your bank.
  4. Savings

    What is a Bounced Check?

    Bounced check is a slang term to describe a check that cannot be processed because its writer has insufficient funds.
  5. Economics

    What is Fractional Reserve Banking?

    Fractional reserve banking is the banking system most countries use today.
  6. Personal Finance

    5 Useless Financial Products That Will Disappear Soon

    Bank deposit slip: what's that? Everyday tools of our financial life that went from indispensable to obsolete.
  7. Personal Finance

    Understanding Endorsements

    In financial terminology, endorsement has a couple of different meanings.
  8. 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.
  9. Investing Basics

    How Does a Sweep Account Work?

    A sweep account is a banking arrangement that transfers – or sweeps – balances from one account into an investment account at the close of each day.
  10. Savings

    The 5 Best Alternatives to Bank Saving Accounts

    Find out about some of the most profitable available alternatives to depositing money in a traditional bank passbook savings account.
  1. Can mutual funds outperform savings accounts?

    A mutual fund can – and should – outperform a savings account. In most cases, it should not even be a close race. Savings ... Read Full Answer >>
  2. How can I cancel a bank draft that I have purchased?

    It is not commonly possible to cancel or stop payment on a bank draft since it, in effect, represents a transaction that ... 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. For what types of accounts are demand deposits available?

    There are essentially three types of accounts available as demand deposits: checking accounts, savings accounts and money ... Read Full Answer >>
  5. What proportion of my income should I put into my demand deposit account?

    Generally speaking, aim to keep between two months and six months worth of your fixed expenses in your demand deposit accounts. ... 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. Ex Works (EXW)

    An international trade term requiring the seller to make goods ready for pickup at his or her own place of business. All ...
  2. Letter of Intent - LOI

    A document outlining the terms of an agreement before it is finalized. LOIs are usually not legally binding in their entirety. ...
  3. Purchasing Power

    The value of a currency expressed in terms of the amount of goods or services that one unit of money can buy. Purchasing ...
  4. Real Estate Investment Trust - REIT

    A REIT is a type of security that invests in real estate through property or mortgages and often trades on major exchanges ...
  5. Section 1231 Property

    A tax term relating to depreciable business property that has been held for over a year. Section 1231 property includes buildings, ...
  6. Term Deposit

    A deposit held at a financial institution that has a fixed term, and guarantees return of principal.
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!