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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