What is Escrow Account?

In property and real estate finance law, an escrow account is a trust account where money is kept on deposit over a time period as a reserve intended to cover certain regularly expected expenses and conditions, such as annual homeowner's insurance premiums or local real estate taxes. An escrow account is essentially a holding place for money. The escrow account is held in trust, or as security, to ensure to another that funds will be available for a future payment to be made.