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#1433398 - 08/24/10 04:49 PM Interest Reserve Account
Banker Chick Offline
Junior Member
Joined: Jul 2006
Posts: 37
The Bank would like to set up an interest reserve account for a business construction loan. This account would be used to pay interes on the loan via automatic deduction. The required interest reserve account will be a savings account.

Can the Bank 'hold' the funds in a savings account for the term of the construction loan?

Is there any proplem with not allowing the business to be authorized signers on the account?

Thank you in advance.
Opinions expressed are my own and do not necessarily reflect those of my employer.

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#1433769 - 08/25/10 04:20 AM Re: Interest Reserve Account Banker Chick
rlcarey Online
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Joined: Jul 2001
Posts: 79,973
Galveston, TX
The establishment of an interest reserve account on a commercial transaction is a contractual issue. Normally, interest reserve accounts are managed solely by the bank according to the contractual arrangement.
The opinions expressed here should not be construed to be those of my employer:

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