A security interest in a deposit account as original collateral is generally perfected only by control — filing a financing statement does not achieve it. Control is obtained in one of three ways: the secured party is the bank; the account is in the secured party’s name; or the bank, the debtor and the secured party sign a control agreement.

What the agreement does. The bank agrees to comply with the secured party’s instructions to dispose of funds without further consent from the debtor. That single undertaking is what creates control.

Blocked or springing. In a blocked account the debtor cannot withdraw at all. Far more common is a springing agreement, where the debtor operates the account normally until the secured party delivers a notice of exclusive control. The negotiation is about what triggers that notice and how quickly the bank must act on it.

Terms to watch. The bank’s own set-off rights, usually preserved for fees and chargebacks and sometimes more broadly; the time the bank has to implement a notice, often a business day or two; termination rights; and indemnities, which banks require and which are rarely negotiable.

Practical point. These take longer to obtain than anyone plans for, particularly where the depository is not the lender. Start early, and confirm at closing that the agreement is fully executed — an unsigned control agreement leaves the interest unperfected however carefully the rest was documented.