Escrow

What is an escrow account?

An escrow account, also known as a deposit account, escrow deposit or holding account, is a reserve fund created when purchasing a product or service. In this setup, an intermediary holds the buyer’s money and releases it only when the purchase process is successfully completed.

An escrow agent can be a notary, a bank (via a dedicated account) or a specialised company.
The escrow system is used as a way to guarantee that the buyer has sufficient funds to make the payment. The deposit acts as a guarantee that the money will be available once the agreed product or service is delivered, completing the transaction.

How does an escrow account work?

The process is simple:

1. The buyer deposits the funds into the escrow account.

2. The escrow agent holds the money while the transaction is verified.

3. Once all the agreed conditions are met, the money is released to the seller.

This way, the buyer is protected — the payment won’t be executed until they receive what was agreed — and the seller has the assurance that the funds are available and secured from the beginning.