Account Activity

What Is Account Activity?

In finance and investments, account activity alludes to the transactions made in a specific brokerage or bank account. These incorporate cash withdrawals, bill payments, wire transfers, and other such transactions.

Account activity is in some cases utilized in reward programs to decide if a customer meets all requirements for a specific award. In different cases, financial institutions will offer lower fees for clients that keep a large amount of account activity.

Figuring out Account Activity

In banking, common instances of account activity incorporate transferring funds between accounts or sending money through electronic funds transfers (EFT). For business customers, a common source of account activity is overseeing accounts receivable and accounts payable, as well as dealing with the employee payroll. Clients who use investment brokerage services will likewise create account activity by putting trades or borrowing on margin.

Financial institutions will frequently offer incentives for clients to be active users of their accounts. According to the firm's viewpoint, high activity is beneficial due to the different fees associated with it. Nonetheless, it can likewise be beneficial on the grounds that clients who participate in different types of transactions at one institution are less prone to switch from that institution to a contender. Therefore, firms will frequently give rewards programs, diminished fees, and different benefits for clients who are active users of their accounts.

To track and reward clients' account activity, banks and other financial institutions need to keep up with itemized and accurate records of client transactions. In the past, this was finished through paper recordkeeping, yet today it is fundamentally electronic in nature. For example, data can be consequently followed and accounted for by online banking and mobile banking platforms. Similarly, credit card companies and brokerage firms can handle transactions almost quickly, regularly without the requirement for any paperwork whatsoever.

Today, manual recordkeeping is generally held for rare and substantial activities like new account arrangements, mortgage applications, or solicitations for refinancing. These transactions regularly affect face to face meetings with firm staff in which reports can be evaluated and endorsed face to face. Now and again, third-party experts may likewise be involved, like legal advisors, accountants, and appraisers.

A periodic summary of account activity with a beginning date and an ending date shows up on a account statement. Most account statements for financial accounts are gathered month to month, yet some might be done quarterly.

Illustration of Account Activity

Laura is a client of XYZ Financial, a large national bank. In her daily life, she utilizes XYZ's online and smartphone platform for the vast majority of her banking needs. As of now, Laura has a checking account and a savings account at the bank as well as a credit card which is held at a rival financial institution, ABC Credit.

To draw in and hold new customers, XYZ is offering a promotion by which clients can appreciate lower fees on the off chance that they keep up with account activity of no less than 10 transactions each month. Laura gauges that between her two accounts she as of now generates five transactions each month through activities like bill payments and cash withdrawals.

To bring her total up to the required level, she chooses to close her credit card at ABC Credit and on second thought apply for one with XYZ Financial. She reasons that once her credit card transactions are figured in with her total, her combined account activity with XYZ will be adequate to earn the decreased fees offered by the promotion.

Special Considerations

A activity charge is a fee charged by financial institutions in response to specific account transactions or activities. Common activity charges can be applied to pulling out money from an ATM (other than the institution's own), not meeting least account requirements, overdrawing an account, transferring funds between accounts, or — especially on account of savings accounts — surpassing the permitted number of transactions.

The subtleties of an account's activity charges ought to be spread out in its fee schedule and agreed upon when a customer signs the forms that formally open the account.

Highlights

• Bill payments, cash withdrawals, and wire transfers are instances of account activities.
• Firms frequently give incentives to customers to keep up with high rates of account activity, to create fee revenue and energize customer retention.
• In finance and investments, account activity alludes to the transactions made by a client in a specific brokerage or bank account.