What Does FBO Stand For in Banking?
While reviewing your bank account, you may have come across the abbreviation FBO in the past. But what does FBO stand for in banking?
FBO stands for "for benefit of." When used, this phrase means that funds received by a party are intended to go to another party, as per the clearly outlined instructions. Most often, FBO will be used with wire transfers. FBO on a wire transfer indicates that the money in a bank account isn't going to stay there — it's going to be moved to another account.
Moreover, an FBO bank account, or a special bank account set up for donations, may be made on someone's behalf to organize aid. For example, if a child has a terminal illness or a family is going through a crisis, a special account might be a way to distribute mutual aid funds.