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Finance Dictionary and Glossary of Investment Terms
good faith deposit
A deposit paid by a buyer to a seller to demonstrate intention to complete the purchase. also called earnest money.
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.