Escrow

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.

Escrow is money held by a third party in a separate account for a specific purpose (e.g., taxes, property transactions) and released only when agreed conditions are met.

- Used in treasury and financial management for funding, investment, and risk decisions.
- Used to evaluate cash flows, financing costs, and capital structure.

- Example: Finance teams use **Escrow** when planning funding needs and managing cash and risk.

- Why it matters: Supports liquidity and risk control and improves the quality of financing and investment decisions.