An escrow account is a temporary legal arrangement between two transacting parties where a third party holds the financial payment12. The third party is usually a bank or an escrow agent. It provides security against scams and frauds especially with high asset value and dispute-prone sectors like Real Estate2. Having an escrow account reduces the risk of non-payment. It is a temporary account that operates only up to the completion of the transaction1. An escrow account is a temporary legal arrangement between two transacting parties where a third party holds the financial payment. The third party is usually a bank or an escrow agent. Having an escrow account reduces the risk of non-payment. It is a temporary account that operates only up to the completion of the transaction. An escrow account is a third party account where funds are kept before they are transferred to the ultimate party. It provides security against scams and frauds especially with high asset value and dispute-prone sectors like Real Estate. What are escrow accounts? Escrow accounts are a financial instrument in which an asset or escrow money is held by a third party on behalf of 2 other parties that are in the process of completing a transaction. Escrow accounts can hold money, securities, funds, and other assets. What is escrow & how does it work? Ashwin Chawwla, founder and CEO, Escrowffrr says, “Using escrow, a buyer can place their funds in a bank-based escrow account which is supervised by a third party. The third-party disburses the funds from the escrow account to the seller only after all conditions in the financial agreement between the two parties have been met.” What is escrow in India? Escrow in India is used across industries and businesses in a range of transactions. The fundamental mechanism of an escrow account is as follows: An escrow account is a special kind of account that holds money or assets until certain conditions are met. Why should you use an escrow account? This is because escrow accounts provide an important layer of protection and transparency to the parties involved in the transaction. Escrow accounts minimize the risk of fraud and scams by safeguarding all funds until all terms and conditions of the agreement are met. Here are a few more benefits of using an escrow account for your transactions: