What is an escrow account in a bank

An escrow account is a secure, temporary bank account where a neutral third party holds funds or assets on behalf of two parties involved in a transaction. The funds are only released once all predefined contractual terms and conditions are fulfilled. In India, these accounts are widely used to ensure transparency and security in:

• Real estate transactions to safeguard homebuyer funds.
• Mergers and acquisitions.
• Online marketplaces and high-value business deals.

This arrangement minimizes risk and builds trust by ensuring the seller receives payment only after meeting their obligations.