Escrow account

An escrow account, or trust account, is accounted for by a property that is not owned by the account holder. The account holder also maintains the account for third-party account. Depending on the type and distribution, you can instruct open and hidden fiduciary accounts. This special form of account is usually hold by notaries, lawyers and tax consultants or private trustees. This type of account management is also used in the payment area. The account holder is also referred to as a trustee in this context.

Purpose of trust accounts

An escrow account is always created when the assets of a person, the so-called trustor, are to be administered by a third-party, the trustee. It is usually managed as a bank account, for example as a custody account, current account, savings or term account. The trustee has full control on the account. Escrow accounts are used in ​​construction or real estate financing, and in the payment service area. The purpose of the account is that the buyer does not completely lose overview on the purchase price and in contrast the seller does not receive this influence completely. Payment service provider use these, among other things, to manage security deposits.