What it is:
Also called an account freeze, an account hold occurs when a bank or other financial institution prevents any transactions from hitting an account.
How it works/Example:
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 place a hold on his account, which prevents him from accessing any of the money he made dealing. It also prevents him from paying his bills.
Why it matters:
The government, regulators and even creditors or courts can place account holds for various reasons. A hold is not always permanent; the appropriate documentation can lift the hold. Brokerage and investment accounts are also subject to account holds, and it is possible to a hold on your own accounts.