cash account

cash account definition - business

cash account

A brokerage account requiring that cash payments on purchases and deliveries on sales be made promptly. (Settlement is officially three business days after the transaction date.) The cash account is the most popular type of brokerage account even though it does not permit investor borrowing (that is, buying on margin). Certain accounts, such as Individual Retirement Accounts, must be cash accounts. Also called special cash account. Compare margin account.

The American Heritage® Dictionary of Business Terms Copyright © 2009 by Houghton Mifflin Harcourt Publishing Company. Published by Houghton Mifflin Harcourt Publishing Company. All rights reserved.

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