Bank account

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Letter from the Midland Bank to a customer, informing them on the introduction on electronic data processing and on account numbers for current accounts

A bank account is a financial account maintained by a bank or other financial institution for a customer. A bank account can be a deposit account, a credit card account, a current account, or any other type of account offered by a financial institution, and represents the funds that the customer has entrusted to or borrowed from the financial institution.

The financial transactions which have occurred on a bank account within a given period on time are reported to the customer on a bank statement, and the balance on the accounts at any point in time is the financial position of the customer with the institution.

The laws of each country specify how bank accounts may be opened and operated. They may specify who may open an account, for example, how the signatories can identify themselves, deposit, withdrawal limits among other specifications. The minimum age for opening a bank account is most commonly 18 years of age. However, in some countries, the minimum age to open a bank account can be 16 years. In general, it is unlawful to open an account in a false name.

Account structure[edit]

From the customer’s point of view, bank accounts may have a positive, or credit balance, when the financial institution owes money to the customer; or a negative, or debit balance, when the customer owes the financial institution money.[1]

Broadly, accounts that hold credit balances are referred to as deposit accounts, and accounts opened to hold debit balances are referred to as loan accounts. Some accounts can switch between credit and debit balances.

Some accounts are categorized by the function rather than nature of the balance they hold, such as savings account, which routinely are in credit.

Financial institutions have an account numbering scheme to identify each account, which is important as a customer may have multiple accounts.

Types of accounts[edit]

All financial institutions have their own names for the various accounts which they open for customers, but can be categorised as:

See also[edit]


  1. ^ "What is debit balance? definition and meaning". Retrieved 2013-12-17.