Final answer:
True, a brokerage escrow account can indeed be opened at any federally insured financial institution, which provides protection for the funds in the account up to $250,000 through the FDIC.
Step-by-step explanation:
The statement that a brokerage escrow account may be opened at any financial institution, including online institutions, as long as they're federally insured, is true. An escrow is a financial arrangement where a third party holds and regulates 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 account which is only released when all of the terms of an agreement are met.
Brokerages use escrow accounts during the process of buying and selling a home to hold the buyer's earnest money, the seller's proceeds, or funds to pay for taxes and insurance. It's essential that these accounts are federally insured to protect the funds from bank failures or similar financial issues. Institutions such as the FDIC (Federal Deposit Insurance Corporation) insure deposits up to $250,000, providing significant protection for the funds in escrow