Do frozen accounts accrue interest while blocked?

Yes — OFAC regulations generally require blocked funds to be held in an interest-bearing account at a commercially reasonable rate, matching what the institution offers other depositors for deposits of comparable size and maturity. Once a U.S. person determines funds must be blocked, they must place them in a segregated or omnibus blocked account and file a blocking report with OFAC within 10 business days under 31 CFR § 501.603. Program-specific rules, such as 31 CFR § 542.203, spell out the same interest-bearing requirement and let funds already held in longer-maturity instruments (up to 180 days) stay in place until maturity, provided the interest is redirected into a blocked account. Banks may debit blocked accounts only for normal, published service charges — never to pay the account holder or a third party without a specific license.