The good funds model is a principle that is used in the banking and financial services industry to ensure the integrity and security of financial transactions. Under the good funds model, a financial institution is only allowed to release funds from a customer’s account once it has received good funds, meaning that the funds are available, legitimate, and not subject to any disputes or other issues.
The good funds model is based on the principle that a financial institution should not release funds from a customer’s account unless it is confident that the funds are good and can be used to complete the transaction. This means that the institution must verify that the funds are available, legitimate, and not subject to any disputes or other issues that could prevent the transaction from being completed.
The good funds model is used to protect both the financial institution and its customers from the risks associated with fraudulent or disputed transactions. By ensuring that only good funds are released from a customer’s account, the good funds model helps to prevent fraud and other financial crimes, and helps to maintain the integrity and stability of the financial system. The good funds model is an important principle that is used by financial institutions around the world to ensure the security and reliability of financial transactions.
This page was last updated on June 27, 2023.