Glossary · Finance & Lending
Deposit Bond
18 August 2026 · 1 min read
Written for Buyer's Agent, Mortgage Broker, Consumer/Investor
A deposit bond is a guarantee, usually issued by a financial institution, that acts as a substitute for a cash deposit when purchasing property, allowing a buyer to secure a contract without paying the deposit upfront in cash.
Deposit bonds are commonly used by buyers who have equity or funds tied up elsewhere, such as in another property being sold simultaneously, or by buyers purchasing off-the-plan where settlement is a long way off. The bond guarantees to the vendor that the deposit amount will be paid at settlement, and typically incurs a one-off fee rather than tying up the full deposit amount in cash for an extended period.