An escrow account is an account held by a third party for you, but the funds do not belong to the third party, and are usually used to pay future bills. The most common form of an escrow account is one created by your mortgage lender that is used to pay your property taxes and insurance for your home. For example, if your property taxes are $300 per year, and your insurance is $600 per year, your monthly mortgage payment will include $75 over what you are paying on the actual loan, and that $75 will be deposited into an escrow account that will be used to pay your property tax and insurance every year.
An escrow account may also be set up with a broker to hold and disburse payments at a later date based on the completion or fulfillment of contractually agreed upon conditions. For example, if you bought a used car off of a private individual and had a one month trial period with the car, you could set up an escrow account to pay off the car at the end of that month.