To whom does the interest earned in an escrow account accrue?

The interest earned in an escrow account typically accrues to the person agreed to in writing by all parties involved in the transaction. This agreement should be documented to ensure clarity and protect the interests of all parties. The terms of the escrow, including the distribution of interest, are often outlined in the escrow agreement signed by the buyer, seller, and any other relevant parties. By having all parties in agreement, it helps to prevent disputes over who is entitled to receive the interest earned during the holding period of the funds.

In contrast, the government usually does not have a claim to the interest unless there are specific legal regulations or tax considerations that apply. The licensee, while facilitating the transaction, is not entitled to the interest unless explicitly designated by the parties in the agreement. Similarly, the real estate company would not automatically accrue the interest unless stated in a contractual arrangement made with the property owners.