Pay the Real Estate Property Tax Yourself

If you have a home mortgage, you are likely to have an escrow account, which collects extra money every month along with your mortgage payments. This extra money is used to pay for the real estate property tax and annual home owner's insurance premium. The money in the escrow account usually does not earn interest, unlike your savings account or other investment accounts.

What I have done, and what I recommend, is that you cancel this escrow account, and elect to pay the property tax (and the home owner's insurance premium) yourself.  The escrow increases your monthly payment, and does not earn you any interest income. Depending on your area, they may also adjust the escrow amount on a yearly basis. This will fluctuate your monthly mortgage payment amount. If you set up recurring online electronic payments (like I do), it creates extra trouble because you have to constantly adjust the payment amount.  So, why bother? I would rather keep my money in my investment accounts to continue earning me interest income throughout the year.  As an added bonus, I always charge my home owner's insurance premium to my rewards credit card, so I can get cash rebate from my credit card company.  I also set up online electronic payment for my property taxes, so it does not cost me a stamp either.

There are two more things to consider:

My escrow account was free when I had it. But I know some people's escrow account actually had an annual maintenance fee.  Check out with your escrow account administer, and find out about it.  If you are actually paying a maintenance fee on your escrow account, then you are really better off cancelling this account.

My escrow account did not pay an interest on the balance I kept in there.  However, I have also learned that some escrow account administer actually pays a comparable savings interest rate on the escrow balance.  Check out the terms on your account. If you are in fact getting a decent interest income, then of course you can keep your escrow account.  

If you decide to cancel your escrow account, all you need to do is call your mortgage lender and tell them that. They should promptly refund you the entire balance in your escrow account, and there should be no fee involved.

It is your money. Keep it in your pocket.