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What is a Segregated Named Account?

A segregated named account is a type of financial account that is set up to hold specific funds or assets that are separate from the rest of the financial institution’s general funds. These accounts are often used to hold funds or assets that belong to a particular individual, business, or other entity, and are often referred to as “named accounts” because they are associated with a specific name or entity.

Segregated named accounts are typically used in a variety of situations, including:

  • To hold funds or assets that are intended for a specific purpose, such as a trust fund or a retirement account
  • To hold funds or assets that are required to be kept separate by law, such as funds held in escrow by a real estate agent
  • To hold funds or assets that are the subject of a legal dispute, such as funds that are being held in trust while a lawsuit is pending

Segregated named accounts are typically managed by a financial institution, such as a bank or brokerage firm, and are subject to the same regulatory requirements as other financial accounts. The purpose of a segregated named account is to ensure that the funds or assets held in the account are kept separate from the financial institution’s general funds, and are used for the specific purpose for which they were intended.

  • Segregated named accounts may be used to hold a variety of different types of assets, including cash, securities, and other financial instruments.
  • The terms and conditions of a segregated named account may vary depending on the specific financial institution and the purpose for which the account is being used. For example, some segregated named accounts may have different fees or restrictions on withdrawals or transfers.
  • In some cases, segregated named accounts may be set up to provide additional protections for the funds or assets held in the account. For example, a financial institution may hold a segregated named account for a client that is subject to certain regulatory requirements, such as segregation of client assets, to ensure that the client’s funds are kept separate from the institution’s own funds and are protected in the event of the institution’s financial failure.
  • If you are considering setting up a segregated named account, it is important to carefully review the terms and conditions of the account and to understand any potential risks or limitations associated with the account. You may also wish to seek advice from a financial professional or legal counsel to ensure that the account is suitable for your needs.

This page was last updated on January 2, 2023.