Good faith deposit


Also found in: Acronyms.

Good faith deposit

Used in the context of commodities. Refers to the initial margin account deposit needed when buying or selling a futures contract; approximately 2%-10% of the contract value.
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

1. In municipal bonds, a small amount of money, usually less than 5% of an issue, that underwriters give to the issuer in exchange for the right to place part of the issue. A good faith deposit is a sign that an underwriter has a vested interest in placing the issue and will therefore act vigorously on behalf of the issuer.

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

1. A sum of money required of an investor who is placing an order when that investor is not known to the brokerage firm. A good faith deposit ensures that the customer will follow through with proper payment for a buy order or with delivery of securities for a sell order.
2. A sum of money deposited by competing underwriters of a new municipal bond issue. The deposit is a relatively small proportion (usually under 5%) of the value of the issue being underwritten.

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.

References in periodicals archive ?
Good Faith Deposits of all Qualified Bidders shall be held in a separate interest-bearing account for the Debtor's benefit until the earlier of (a) August 12, 2010 or (b) consummation of a transaction involving any other Qualified Bidder for the TRBP Assets.
In the event of a competitive or negotiated sale of bonds, assist County in the sale of bonds to the Investment Banker including recommendations to County on timing of sales, specific bond purchase contract requirements, good faith deposit checks, bond maturities, interest rates, discount or premiums offered by the Investment Banker, and inve
When dealing with a portfolio lender, borrowers can typically lock rate by simply signing the application and putting up a refundable good faith deposit. The loan amount is typically finalized at this time as well, barring any material changes in property circumstances prior to closing.
The binder included the identities of the purchaser and the seller, the location of the property by its address, a good faith deposit of $1,000, the total purchase price of $1.75 million, which would be paid at closing and that the deed would be the customary and acceptable type.
A good faith deposit of $38,350 is required from the successful bidder and may be forfeited to the City in the even the successful bidder fails or refuses to take and pay for the Bonds.
Notes: Good Faith Deposit: $414,700 The Bonds will be dated the date of delivery, that is expected to be April 13, 2016, and bear interest from such date payable on each April 1 and October 1, commencing October 1, 2016, Questions may be directed to the undersigned at 101 Monroe Street, 15th Floor, Rockville, Maryland 20850, telephone 240-777-8870.
As A Good Faith Deposit To Ensure Execution Of The Contract, If Awarded, Attached To The Bid, Bidder Will Submit To Cwa Either (a) A Certified Cashier s Check Drawn On A Responsible Bank In Texas Equal To At Least Five Percent (2%) Of The Total Bid Amount, Or (b) A Bid Bond Of At Least Five Percent (5%) Of The Total Bid Amount And Issued By A Surety That Is Legally Authorized To Do Business In Texas.
but good faith deposits between vendor and buyer remain.
That is, does he or she have all any necessary appraisals fees, good faith deposits, down payments, commitment fees, closing cost, etc., to see this deal through?