Florida Escrow Accounts: Personal Funds and Interest-Bearing Accounts

This lesson covers two different rules for broker-held escrow: limited personal funds and earning interest on customer deposits.

Florida's escrow rule permits a limited amount of the broker's personal or brokerage money in an escrow account. This is a narrow allowance, not permission to treat customer funds as business operating money.

Remember the account type and limit

These are maximum permitted amounts, not required minimum deposits. The limits concern the broker's own funds; they are not caps on the customer funds held in escrow.

Why might the allowance be useful?

A practical example is maintaining a small bank balance to cover account charges. That explanation helps make the rule memorable, but the exam distinction is the permitted amount and account type.

Practice check

A question asks the maximum brokerage-owned balance allowed in a sales escrow account. The answer is $1,000. Do not select $5,000 merely because both numbers relate to escrow.

Source: Rule 61J2-14.010(2), Florida Administrative Code. Other escrow duties remain applicable.

Can a broker put escrow money in an interest-bearing account?

Yes, with the written permission of all parties to the transaction. Under Rule 61J2-14.014, the written agreement must cover three things:

1. Placing the escrow money in an interest-bearing account.
2. Who receives the interest.
3. When the earned interest will be disbursed.

The escrow account must be insured and held in a depository located and doing business in Florida. This lesson addresses escrow held by a real estate broker; do not automatically apply the broker's rules to a lender's tax-and-insurance escrow or to every other escrow holder.

The buyer's signature alone is not enough. Even if the buyer supplied the deposit, the rule requires all parties' written permission. Oral agreement is insufficient, and the interest does not automatically belong to the buyer or to the broker.

How must the broker disburse the funds?

The rule provides two methods:

• Transfer before disbursement: Move the principal and interest to a non-interest-bearing escrow account before paying the designated party at the agreed time. If all parties designated the broker to receive the interest, transfer only the principal to the non-interest-bearing escrow account and transfer the interest directly to the broker's operating account.
• Individual-account alternative: Establish an individual interest-bearing escrow account for a specific transaction or sum of money. On the agreed disbursement date, close that account and issue checks to the appropriate recipients for the principal and interest.

The permission to earn interest does not make the customer's deposit brokerage operating money. Keep this rule separate from the limited personal-funds allowance explained above.

Example

A buyer delivers a $15,000 purchase deposit. The buyer and seller sign an agreement authorizing an interest-bearing account, naming the buyer as the interest recipient, and specifying disbursement at closing. The broker uses an insured Florida depository and follows a permitted disbursement method. The account earns $45. That $45 is handled as the agreement directs; it is not an automatic service fee for the broker.

Practice questions

1. Only the buyer signs permission to earn interest. Is that enough?
2. All parties agree in writing to the account but say nothing about who gets the interest or when. Is the agreement complete?
3. All parties designate the broker to receive interest. Under the transfer method, where do the principal and interest go?

Answers and explanations

1. No. All parties to the transaction must give written permission.
2. No. The written permission must also address the interest recipient and disbursement time.
3. Principal to a non-interest-bearing escrow account; interest directly to the broker's operating account. This is the rule's specific procedure when all parties designate the broker as the interest recipient.

Interest-bearing-account rule checked October 20, 2026; the Florida Administrative Code lists June 28, 1993 as its current effective date.

Next, review escrow deposit deadlines or return to the exam-prep guide. If a course explanation is unclear, submit a support request.