Good faith deposit(redirected from Good Faith Deposits)
Good faith deposit
Used in the context of securities to describe the deposit required by securities firms engaged in transactions on behalf of a new client.
Also used to refer to the deposit with a municipal bond issuer by firms competing for the underwriting business.
Good Faith Deposit
2. In securities, a small amount of money from an order that a brokerage requires a new client to deposit in exchange for filling the order. The good faith deposit ensures that the new client is serious about the order and will be likely to settle or make delivery when the time comes. This is done to reduce the risk to the brokerage when it takes a new client. It is also called earnest money.
3. See: Initial margin amount.
good faith deposit
Good faith deposit.
A good faith deposit is a sum of money provided by a buyer to a seller, which demonstrates the buyer's intention to purchase.
For instance, if you've decided on a home you want to buy, you generally make a good faith deposit to support your bid.
A good faith deposit, also called a binder or earnest money, is usually a fixed amount that's standard in the community where you're buying. It's different from a down payment. That's a larger cash payment, figured as a percentage of the purchase price, which you make when you sign the contract to purchase the property.
If you and the seller can't agree on the terms of the sale, you generally get your good faith deposit back.