interest bearing escrow account
In: Economics
In some cases, landlords would take your security deposit and spend it. That meant that when you moved out, they’d have to either come up with that money, or find excuses (damages) not to give it back. That still happens sometimes, and it’s a bad system.
Instead, your new landlord is taking your security deposit and putting it in a savings account. It will stay there until you move out, and it will earn interest. Probably not much interest, but some.
Because the bank will be paying you interest, they need you to sign a W9 form. That’s perfectly normal. They use that to report the few dollars you earn in interest to the IRS, who will add a few cents to your tax bill. This is the kind of thing that happens when the government gets involved in things. You live in the United States, so get used to it.
Seriously, though, it’s perfectly normal, and you should just do it. It’s a couple of papers you sign now, and you’ll get a very small amount of money for it later.
Latest Answers