What is an Account Freeze?
Also called an account hold, an account freeze occurs when a bank or other financial institution prevents any transactions from hitting an account.
How Does an Account Freeze Work?
For example, let's say John Doe is selling drugs for a living. He regularly deposits his money into a checking account at Bank XYZ.
The cops eventually discover that John Doe is a drug dealer. They arrest him and freeze his account, which prevents him from accessing any of the money he made dealing. It also prevents him from paying his bills.
Why Does an Account Freeze Matter?
The government, regulators, and even creditors or courts can freeze accounts for various reasons. A freeze is not always permanent; the appropriate documentation can lift the freeze (called "thawing the assets"). Brokerage and investment accounts are also subject to freezing, and it is possible to a freeze on your own accounts.
Personalized Financial Plans for an Uncertain Market
In today’s uncertain market, investors are looking for answers to help them grow and protect their savings. So we partnered with Vanguard Advisers -- one of the most trusted names in finance -- to offer you a financial plan built to withstand a variety of market and economic conditions. A Vanguard advisor will craft your customized plan and then manage your savings, giving you more confidence to help you meet your goals. Click here to get started.
Read This Next
Buying life insurance is daunting enough. No one wants to think about when they'll die and how their loved ones will continue without them -- financially and otherwise. ...Read More →
As hackers continue to perfect their craft, credit card fraud continues to be an easy way for crooks to get fast cash. But there's one kind of fraud that's potentially much more dangerous...Read More →