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Question

The term "Escrow account" generally refers to:

A the money held in a third-party account on behalf of transacting parties. Correct Answer Incorrect Answer
B the bank accounts that could be maintained without or with very low minimum balance. Correct Answer Incorrect Answer
C the bank account on which no restrictions on the number of times deposit in cash/cheque can be made. Correct Answer Incorrect Answer
D the bank accounts for senior citizens and disabled persons. Correct Answer Incorrect Answer

Solution

An escrow account in simple terms is a third party account. It is a separate bank account to hold money which belongs to others and where the money parked will be released only under fulfilment of certain conditions of a contract. The term escrow is derived from the French term 'escroue" meaning a scrap of paper or roll of parchment, an indicator of the deed that was held by a third party till a transaction is completed.

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