An instruction that is set by a bank to receive a wire transfer, specifying the account name on file with the bank. This protocol is used in electronic funds transfers to notate a second beneficiary or to designate a certain contact person or organization.

An FBO account (for benefit of account) allows customers (accountholders) to transfer funds between multiple banks bypassing the traditional form-based banking system. A FOB makes it easier to move money from one account (transferor’s account) to another (transferee’s account) without having to submit multiple forms.

FBO accounts are an efficient vehicle  to manage funds for beneficiaries. Unlike traditional accounts, this vehicle differentiates between the account manager and the beneficiary. It has become essential in commercial finance and the FinTech industry, where transfers of funds need to be carried out without the time lag and hassles of the traditional methods.

In addition to ease of flow, FBO accounts are fiduciary vehicles for separation of legal ownership from beneficial ownership for certain practical purposes (including, tax and operational considerations).