Synapse allows you to instantly open up bank accounts at our partner banks. Below are the different account types available to your platform within our API:
Deposit Accounts -- These are FDIC insured general purpose deposit accounts. Funds sit in a user's name. Accounts have both credit and debit permissions. Because these are actual accounts held at our partner bank, they require bank level KYC.
Interest Bearing Accounts -- These are interest-bearing FDIC insured deposit accounts. They are intended for holding funds, so there may be limits to the number of debits allowed from the account.
Clearing Accounts: Clearing accounts are held in pooled accounts at our partner banks. They are not eligible for individual insurance, including FDIC insured, and are not intended to hold funds for long. They allow you to move funds without taking ownership of the funds. With clearing accounts you can collect payments from multiple sources, but can only deposit into a single account associated with your clearing account. These accounts require less KYC than Deposit Accounts.
Escrow Accounts: These accounts are not general purpose accounts. They are tied to a very specific purpose: Holding funds for a set period of time until an obligation or period of time is met (ex: completing an agreement). If the agreed upon terms are fulfilled, money moves into the fund recipient's account. If the agreed upon terms are not fulfilled, funds will return to the sender.
Fiduciary Account (FBO): Fiduciary accounts are deposit accounts opened by a platform (in the platform's name) for the benefit of one or more of their users. The fiduciary account can be established for the benefit of a single user or a commingled account may be established for the benefit of multiple users. The platform opening the account does not have an ownership interest in the funds held within the fiduciary account (i.e. the platform is holding the funds on the behalf of the users). Platforms that open Fiduciary accounts through Synapse are allowed to use Synapse's ledger to maintain sub-accounts for their users (so it's easier to track who funds belong to). If you are interested in using a fiduciary account, we ask that you consult your legal counsel on licensing requirements specific to your industry. Because you are not opening up individual deposit accounts for each user, you do not require bank level KYC for each user.