An escrow account is a type of holding account where a third party receives and disburses money or property for the primary transacting parties, with the disbursement dependent on conditions agreed to by the transacting parties. Escrow accounts are commonly used in real estate transactions to protect both the buyer and the seller throughout the home buying process. Here are some key points about escrow accounts:

• An escrow account is separate from the mortgage account where deposit of funds occurs for payment of certain conditions that apply to the mortgage, usually property taxes and insurance.
• The escrow agent has the duty to properly account for the escrow funds and ensure that usage of funds is explicitly for the purpose intended.
• Escrow accounts are used to hold a homeowner’s funds for property taxes and homeowners insurance, and to protect the buyer’s good faith deposit so the money goes to the right party according to the conditions of the sale.
• Escrow accounts are managed by the lender, who is responsible for paying bills on time and liable for penalties should there be a missed or late payment.
• Escrow accounts can be used for various transactions, including real estate, stock issuances, and online sales.

In summary, an escrow account is a type of holding account that is used to protect both parties in a transaction and ensure that funds are properly accounted for and disbursed according to the agreed-upon conditions.