Escrow
Financial Dictionary — Banking & Finance
Definition
escrow Money set aside for a specific purpose. An individual's monthly mortgage payment might include $300 per month for the real estate taxes due at the end of the year. The $300 is said to be put into escrow each month.
Use cases, Example & Why it matters
Use cases
- Used in treasury and financial management for funding, investment, and risk decisions.
- Used to evaluate cash flows, financing costs, and capital structure.
- Used to evaluate cash flows, financing costs, and capital structure.
Example
- Example: Finance teams use **Escrow** when planning funding needs and managing cash and risk.
Why it matters
- Why it matters: Supports liquidity and risk control and improves the quality of financing and investment decisions.