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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.
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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.
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