Deposit

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DEFINITION of 'Deposit'

1. A transaction involving a transfer of funds to another party for safekeeping.

2. A portion of funds that is used as security or collateral for the delivery of a good.

BREAKING DOWN 'Deposit'

1. This type of deposit is identical to the money an investor transfers into a bank's savings or checking accounts.

2. Some contracts require a percentage of funds to be transferred before delivery as an act of good faith. An example is the initial margin deposit required for entering into a new futures contract.

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RELATED FAQS
  1. What are the warning signs of online hotel / travel booking scams?

    Travel booking scams ask travelers to book a vacation stay at a residential rental property that is fake or that belongs ... Read Full Answer >>
  2. How does analyzing a bank's financial statements differ from companies in other sectors?

    Just like a nonfinancial service company, a bank has to manage the trade-off between its profits and risks. However, two ... Read Full Answer >>
  3. What is the difference between a savings & loan company and a bank?

    Savings and loan (S&L) companies provide many of the same services to customers as banks, including deposits, loans, ... Read Full Answer >>
  4. How do futures contracts roll over?

    Traders roll over futures contracts to switch from the front month contract that is close to expiration to another contract ... Read Full Answer >>
  5. Why do companies enter into futures contracts?

    Different types of companies may enter into futures contracts for different purposes. The most common reason is to hedge ... Read Full Answer >>
  6. How can I cancel a bank draft that I have purchased?

    It is not commonly possible to cancel or stop payment on a bank draft since it, in effect, represents a transaction that ... Read Full Answer >>

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