Definition: A personal bank account is not for business use, but rather for an individual to keep and manage their own personal funds and other assets. This would be your personal banking account rather than a shared corporate account or joint account.
What Does Personal Bank Account Mean?
What is the definition of personal account? The distinction is made between personal accounts and other accounts in banking and accounting because different account types have different implications and treatments. In a business account there are probably many users that are extracting from a large pool of money for the purpose of running a business.
For a personal account, there should only be one person depositing and withdrawing money and therefore security measures will be in place to make sure the right person is accessing the funds. Personal accounts are often kept completely separate from business and joint accounts because they are completely in the interest of one user rather than many.
Let’s look at an example.
The distinction between uses of business and personal accounts can easily be made when you look at a small business owner. In these cases it is very important to distinguish types of account so that all capital is kept separate between personal assets and company assets. Let take someone who owns and operates a small winery with only two other investors who help run the facility.
Any expenses associated with the business (picking grapes, fermenting grape juice, bottling and labeling, licensing, etc.) will all be accounted for as business expenses and taken out of a business account. All profits gained from selling the wine will be put into a business account, then dispersed in the form of earnings to the personal accounts of the three individuals running the company.
Let’s say one individual would like to buy some of the company wine for his family to enjoy. That purchase would be taken out of a personal account because it is solely for individual use.
Define Personal Bank Account: An individual account means a bank account that is only used for non-business activities.