Definitions for "Clearing account"
An account that is used to temporarily accumulate activity, then is periodically zeroed out as the activity is subsequently transferred to other accounts or otherwise distributed. For example, a payroll clearing account is use d to accumulate amounts withheld from employee paychecks. These withholdings are then remitted in lump sums to the appropriate payee, such as the IRS for Federal withholding taxes, and the Arizona Department of Revenue for State withholding taxes.
A bank account used by a mortgage servicer for temporary, short-term deposit of mortgage payments collected for transmittal to investors or for deposit in escrow accounts.
An account used to accumulate total charges or credits so that they can be distributed later among the accounts to which they are allocable or so that the net differences can be transferred to the proper account.