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Information > Financial Terms > This page Active Account 1.
In banking, an account in which deposits and withdrawals are frequently
made. The expense of handling an account varies directly with its
activity because of the chargeable costs (clerical, stationery, use of
the bank's space and equipment, etc.).
An active account should maintain larger average daily balances
than an inactive one, in order to offset the costs involved. 2. In securities markets, an account with a broker showing frequent purchases and sales. Such active accounts generate commissions (which are charged on purchases as well as sales), and thus they are usually given preferential treatment in differentials on rate of interest charged, for example, on debit balances. |