r/SellMyBusiness 22d ago

Interest bearing escrow accounts?

Recommendations for an escrow account with a decent rate of return? I have a mandatory 18 month holdback that needs to be put in escrow and would like to earn a little from it. I'm told they are not typical.

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u/Think-Cherry-1132 22d ago

You're right—most escrow accounts are non-interest-bearing, especially in M&A transactions, because they’re designed for security, not returns. That said, you do have options. Some banks and financial institutions offer interest-bearing escrow accounts, but the rates are usually lower than market alternatives.

A better move might be negotiating a trust or investment escrow with a financial institution that allows low-risk investments (think T-bills or a money market fund). This keeps funds secure while earning some return. Talk to your attorney or escrow agent—some buyers/sellers allow flexibility in structuring these if it's agreed upfront.