Non-Interest Bearing Account

A non-interest bearing account is an account where funds are deposited and held for a prolonged period of time but yield no returns.

A non-interest bearing account is most common in situations where a financial institution must withhold funds from a client of business partner to mediate risk in the relationship.

The financial institution will hold said funds in an account for a pre-determined period of time, but is not obligated to pay interest on such funds, as would be done in more traditional currency accounts such as a savings account at a bank.