Accounting Dictionary


If a person or institution, usually a bank, holds money for you and then delivers it to a third party in your behalf, the money they hold for you is said to be in escrow.

For example, principal and interest on Juanita’s mortgage is $1600. Every month she pays the bank $2300. The bank keeps the extra money then at the end of the year the bank pays Juanita’s property tax and homeowner’s insurance for her. The extra $700 per month that Juanita pays is said to be in escrow until the bank actually pays her tax and insurance.

< Equity Financing

Sign Up to Learn More!

Join our mailing list today to get notified of new discount offers, course updates, Roger CPA Review news, and more!

Scroll to Top