An FBO account is the everyday name for an account set up on a For Benefit Of (FBO) basis: a bank account opened in the name of one party, such as a fintech company or platform, but held for the benefit of its customers rather than as the company's own money. The main entry explains the structure and its legal background in full.
FBO accounts are common in the United States in embedded banking and payments, where a sponsor bank holds one pooled account and the fintech or a technology provider keeps a separate ledger showing how much belongs to each end customer. Where the structure meets the relevant conditions, end customers' funds can qualify for pass-through deposit insurance, provided the records clearly show each person's share.
The term is often used interchangeably with for-benefit-of account. Accurate reconciliation between the bank's balance and the intermediary's ledger is critical, as failures in this area have left customers unable to access their money.