Yes, you are permitted to take a security interest in a deposit account held by your bank as collateral for a loan. To perfect your security interest, you need only have “control” over the deposit account, which you do; no further action is necessary.

Note that if the deposit account was being held at another financial institution, you would need to enter into a valid control agreement with that institution in order to perfect your security interest.

For resources related to our guidance, please see:

• Uniform Commercial Code, 810 ILCS 5/9-203(b) (“[A] security interest is enforceable against the debtor and third parties with respect to the collateral only if: (1) value has been given; (2) the debtor has rights in the collateral or the power to transfer rights in the collateral to a secured party; and . . . (D) the collateral is deposit accounts, electronic chattel paper, investment property, letter-of-credit rights, or electronic documents, and the secured party has control under Section 7-106, 9-104, 9-105, 9-106, or 9-107 pursuant to the debtor’s security agreement.”)

• Uniform Commercial Code, 810 ILCS 5/9-314(a) (“A security interest in investment property, deposit accounts, electronic chattel paper, letter-of-credit rights, electronic documents, or beneficial interests in Illinois land trusts may be perfected by control of the collateral under Section 7-106, 9-104, 9-105, 9-106, 9-107, or 9-107.1.”)

• Uniform Commercial Code, 810 ILCS 5/9-104 (“Requirements for control. A secured party has control of a deposit account if: (1) the secured party is the bank with which the deposit account is maintained; (2) the debtor, secured party, and bank have agreed in an authenticated record that the bank will comply with instructions originated by the secured party directing disposition of the funds in the deposit account without further consent by the debtor; . . .”)