By Emmet R. Wood Director, Audits and Investigations
If you are the broker-in-charge of a real estate office and need to open a bank account to deposit trust funds, the bank account:
- Must be opened in an FDIC insured bank or savings and loan association in North Carolina
- Must be a demand account.
- May be an interest-bearing bank account if written authorization is obtained from the persons for whom the trust funds are being held.
- Cannot be a security, including a government bond.
- May be a certificate of deposit if the CD is insured and the money can be withdrawn on demand without any penalty that would reduce the principal amount.
- Must be designated as a “Trust Account” or “Escrow Account” on the checks, deposit tickets and bank statement.
- May contain a maximum of $100 of personal funds (or such other amount as may be required) to cover bank charges.
- May not contain trust funds on property owned by the broker.
For more information on opening trust accounts, please see the Trust Account Guidelines, Section IV under TRUST ACCOUNTS.
This article came from the November 2004-Vol35-2 edition of the bulletin.