Sub Account

AAA

DEFINITION of 'Sub Account'

A segregated balance of funds (account) for which the bank acts on behalf of the account holder. Such accounts operate under very strict guidelines, as funds can only be accessed in accordance with the terms of a Power of Attorney agreement approved and executed by the bank. The deposited funds are not bank assets.

INVESTOPEDIA EXPLAINS 'Sub Account'

A sub account is often used to compartmentalize larger accounts, thereby allowing for better tracking of various budget details and expenses. For example, a company might set up sub accounts for each of its departments for ease of record keeping.

RELATED TERMS
  1. Call Deposit Account

    A bank account for investment funds that offers the advantages ...
  2. Adjunct Account

    An account in financial reporting that increases the book value ...
  3. Revolving Account

    A type of credit account in which the customer may defer payment ...
  4. Offshore Banking Unit - OBU

    A shell branch located in an international financial center. ...
  5. Hedge Accounting

    A method of accounting where entries for the ownership of a security ...
  6. Linked Savings Account

    Any type of bank savings account that is linked by account number ...
Related Articles
  1. Reading The Balance Sheet
    Investing Basics

    Reading The Balance Sheet

  2. What Is Opportunity Cost And Why Does ...
    Economics

    What Is Opportunity Cost And Why Does ...

  3. Using Enterprise Value To Compare Companies
    Fundamental Analysis

    Using Enterprise Value To Compare Companies

  4. A Clear Look At EBITDA
    Markets

    A Clear Look At EBITDA

comments powered by Disqus
Hot Definitions
  1. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  2. Odious Debt

    Money borrowed by one country from another country and then misappropriated by national rulers. A nation's debt becomes odious ...
  3. Takeover

    A corporate action where an acquiring company makes a bid for an acquiree. If the target company is publicly traded, the ...
  4. Harvest Strategy

    A strategy in which investment in a particular line of business is reduced or eliminated because the revenue brought in by ...
  5. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  6. Pareto Principle

    A principle, named after economist Vilfredo Pareto, that specifies an unequal relationship between inputs and outputs. The ...
Trading Center