Segregated account

Segregated account is a bank account in which a customer's funds are held separate from the funds of a brokerage firm. This is done to create a clear separation between the two groups of money so client funds are not used for the wrong purpose, it also helps ensure that the money can be easily identified as belonging to customers in case a firm becomes bankrupt. In many jurisdictions segregated accounts cannot be used to pay creditors during a liquidation and must be returned to the customers directly.