Lifeline Account

AAA

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.

INVESTOPEDIA EXPLAINS '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.


RELATED TERMS
  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. Linked Transfer Account

    Accounts held by an individual at a financial institution that ...
RELATED FAQS
  1. 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 >>
  2. What are the main benchmarks that track the banking sector?

    The appropriate benchmarks for tracking banking sector performance depend on the type of banking. For instance, commercial-only ... Read Full Answer >>
  3. What are the major categories of financial institutions and what are their primary ...

    In today's financial services marketplace, a financial institution exists to provide a wide variety of deposit, lending and ... Read Full Answer >>
  4. What are the requirements for opening a savings account in the United States?

    Nearly half of all Americans use a savings account with a bank or credit union as a personal savings vehicle. A savings account ... Read Full Answer >>
  5. Can a foreign individual open a savings account in the United States?

    A non-U.S. citizen can open a bank account in the United States – an American Social Security number is not necessary for ... Read Full Answer >>
  6. What is the difference between an investment and a retail bank?

    The activities and types of clients for an investment bank versus those for a retail bank highlight the primary difference ... Read Full Answer >>
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

    Bank Lingo: Routing Number Vs. Account Number

    Each consumer bank account has its own personal ID. And so does the bank. How do these numbers function and how do they protect the account holder?
  5. Investing

    Two Heads Are Better Than One In Finances

    Given the importance of a retirement account, having professional help with savings accounts is far more important than a personal chef or chauffer.
  6. Savings

    5 Things to Look for in a Private Banker

    When putting all your assets into one private banker basket, it pays to proceed with caution.
  7. Savings

    Get Better Mileage Out Of Your Savings At The Pump

    U.S. drivers are spending 90 cents less on a gallon of gas than a year ago, about more than $10 a tank. If that’s you, what are you doing with that money?
  8. Savings

    How Interest Rates Work on Savings Accounts

    Here's what you need to know to grow your rainy-day fund.
  9. Investing

    Do You Need A Private Banker?

    They offer well-heeled clients unparalleled convenience, but could be prone to certain conflicts of interest.
  10. Credit & Loans

    What is a Financial Institution?

    A financial institution is in business to, among other things, accept deposits, make loans, exchange currencies, and broker investment securities.

You May Also Like

Hot Definitions
  1. Bund

    A bond issued by Germany's federal government, or the German word for "bond." Bunds are the German equivalent of U.S. Treasury ...
  2. European Central Bank - ECB

    The central bank responsible for the monetary system of the European Union (EU) and the euro currency. The bank was formed ...
  3. Quantitative Easing

    An unconventional monetary policy in which a central bank purchases private sector financial assets in order to lower interest ...
  4. Current Account Deficit

    A measurement of a country’s trade in which the value of goods and services it imports exceeds the value of goods and services ...
  5. International Monetary Fund - IMF

    An international organization created for the purpose of: 1. Promoting global monetary and exchange stability. 2. Facilitating ...
  6. Risk-Return Tradeoff

    The principle that potential return rises with an increase in risk. Low levels of uncertainty (low-risk) are associated with ...
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!