interest bearing escrow account
In: Economics
An escrow account is a bank account that is tied to a contract. Basically the landlord does not quite trust that you can make rent payments or pay for damages. So they ask you to put money into an escrow account. They are allowed to see how much money is in the account and you can not withdraw any of the money. If there is any kind of conflict around the terms of the contract, such as you not paying rent, they can easily sue you to get the money in your escrow account. The money is still yours so you report it on your taxes and you get the interest from it. But until the landlord release you from the contract you can not touch it.
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