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What is an Account Hold?

An Account Hold is similar to the term Account Freeze, as both imply that transactions have been suspended for an account.

A client’s financial institution might put a hold on his or her account if the individual is suspected of illegal activity, if the account is overdrawn, or if it is requested by a government entity, such as in a lien by the IRS, among other things. This is slightly different than a “freeze” or “moratorium” on the account. In a freeze, all pending transactions will be canceled and no new requests will be honored.

People might have a hold put on their checking account if they overdraw too often, or if they make too large of a cash deposit that needs to be reported. A hold can be placed on their investment account if they have broken the terms of the agreement with their custodial institution or if the institution is waiting on a transaction to clear.

Unlike a freeze, a hold can also refer to limited amount of access to funds or a hold on specific transactions. A hold placed by a bank on an account is only permitted to last a specific amount of time, depending on the reason for the hold.

What is an Account Freeze?
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Keywords: moratorium, collateral, account suspension, frozen account,