Segregated account
Okay kiddo, let me explain what a segregated account is in a way that you can understand. Imagine you have a piggy bank where you keep your allowance money. You put your money in there and no one else can touch it. You know exactly how much money you have in your piggy bank because it's all yours.
Well, a segregated account works in a similar way but it's for big people like banks and investment firms. They hold money for their clients, kind of like how you hold your allowance in your piggy bank. The bank or investment firm puts their clients' money in a special account that is completely separate from their own money. Just like your piggy bank is separate from your mom and dad's money.
This is important because it means that if something goes wrong with the bank or investment firm, like maybe they lose money or go bankrupt, their clients' money is still safe and sound because it's in a separate account. So just like you know your money is safe in your piggy bank, clients know their money is safe in a segregated account.
Does that make sense, little one?
Well, a segregated account works in a similar way but it's for big people like banks and investment firms. They hold money for their clients, kind of like how you hold your allowance in your piggy bank. The bank or investment firm puts their clients' money in a special account that is completely separate from their own money. Just like your piggy bank is separate from your mom and dad's money.
This is important because it means that if something goes wrong with the bank or investment firm, like maybe they lose money or go bankrupt, their clients' money is still safe and sound because it's in a separate account. So just like you know your money is safe in your piggy bank, clients know their money is safe in a segregated account.
Does that make sense, little one?
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