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Who owns funds in an FBO Account?

The beneficial owner of the account (or the party in whose name the account or sub-account was opened) owns the funds in an FBO account. Ownership of the account itself can either be ascribed to the bank’s EIN (tax ID) or the name of the company holding the account.

An example FBO account.

Other questions about FBO accounts

An FBO account, or a For Benefit Of account, allows a company to manage funds on behalf of—or for the benefit of—one or more of their users, without assuming legal ownership of the account.

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An FBO typically poses the same level of risk as other business bank accounts, from a bank counterparty perspective.

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An FBO account is not technically a trust account, although some similarities exist between the two.

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One benefit of an FBO account is that it may provide the user regulatory coverage and may allow some companies to avoid the cumbersome process of becoming registered money transmitters.

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The “FBO” in an FBO account stands for “for benefit of.”

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