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Method for providing escrow services in a brokerage account

[Category : - BUSINESS METHODS]
[Viewed 943 times]

FIELD OF THE INVENTION
The present invention is in the technical field of finance. More particularly, the present invention is in the technical field of a computer-implemented brokerage account. More particularly, the present invention is in the technical field of escrow service.

BACKGROUND OF THE INVENTION
An escrow is a financial arrangement where a third party holds and regulates the payment of the funds required for two parties involved in a given transaction. It helps make transactions more secure by keeping the payment in a secure escrow account which is only released when all of the terms of an agreement are met as overseen by the escrow company.
Escrows are very useful in the case of a transaction where a large amount of money is involved and certain obligations need to be fulfilled before a payment is released. An example of this is when a security deposit is required for a real estate lease where the landlord wants to make sure the tenant will keep his/her end of the bargain until the end of the lease term. However, not every escrow account is an interest-bearing escrow account. Even, if it is an interest-bearing escrow account, the potential capital gain is usually significantly lower than a brokerage/investment account’s capital gain from a top tier brokerage/investment firm. Furthermore, sometimes high performing investments need to be liquidated and placed in an escrow account due to a shortage of available funds.
Currently, in the above referenced real estate example, while the landlord has to deal with the administrative work, legal liabilities and related costs of handling the security deposit, the tenant loses out on any potential higher gains that could have been earned from the tenant’s money if it was deposited into a brokerage/investment account versus a typical escrow account that earns minimal to no interest.
Therefore, there is a current need in the Field of Finance for a service that is capable of producing a higher earning potential for the funds required to be escrowed. Furthermore, there is also a need to eliminate unnecessary and costly financial transactions.

SUMMARY OF THE INVENTION
This invention relates to a method for brokerage/investment accounts. Specifically, this invention relates to a novel method for using a computer-implemented brokerage/investment account that also functions as an escrow account. More specifically, this invention relates to a novel method for using brokerage account investments to be used as collateral without liquidating them. It is an object of the present invention to provide an improved brokerage account. More specifically, it is an object of the present invention to provide an escrow service implementation for a brokerage account which is a computer-implemented investment account that enables investors to buy stocks, bonds, mutual funds and other assets with money they deposit in their account. The invention allows brokerage firms to act as a trusted third-party and continue managing the brokerage account and continue investing the funds as if there is no escrow service in place and only disburse in certain conditions which are agreed upon by both parties. The invention also eliminates the need of the account owner tying up additional funds in a traditional escrow account. The invention is also further applicable to other types of accounts including but not limited to bank accounts.

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