Pooled Accounts
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Pooled Accounts
A pooled account is one where the funds of multiple individuals or entities are held together. Financial institutions often use pooled accounts to manage the funds of many customers within one larger account. Each customer’s balance is tracked separately within the financial institution’s ledger system, even though the physical money is co-mingled.
Advantages of Pooled Accounts:
- Cost-Effectiveness: Pooled accounts can be cheaper to maintain than multiple dedicated accounts.
- Efficiency: They can simplify the payment process for an organization that handles transactions for multiple clients or beneficiaries
Pooled accounts offer operational efficiencies and cost savings for both the financial institution and its clients, by simplifying account management and reducing transaction fees. They are particularly beneficial for investment funds, property management companies, and trust accounts, where they facilitate the collective management of funds while maintaining individual account integrity.