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What does FBO account stand for?
The “FBO” in an FBO account stands for “for benefit of.” An FBO account allows a company to manage funds on behalf of one or more of their users, without assuming legal ownership of the 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.
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.
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.
An FBO account is not technically a trust account, although some similarities exist between the two.