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deposit

dih-PAH-zit /dɪˈpɒzɪt/

nounverbA2IELTSTOEFL

everydaybusiness

A sum of money paid as a guarantee or first installment for the acquisition of a good or service, or placed in a bank account.

In car rentals, a deposit is usually a temporary 'hold' placed on a credit card, which is released once the vehicle is returned in its original condition.

The story behind the word. The Latin root 'deponere' combines 'de-' (down) and 'ponere' (to place). It literally meant 'to put something down' for safekeeping. This evolved into the financial practice of putting down money as a pledge of good faith.

Word relationships

down payment: A down payment is a partial payment made upfront that is deducted from the total purchase price, whereas a deposit is often refunded after a service is completed.
pledge: A pledge is a solemn promise or asset offered as security, but it is less commonly used in standard commercial transactions than deposit.

refund: A refund is the return of money previously paid, whereas a deposit is the initial payment made to secure something.

Commonly confused with

retainer: A retainer is a fee paid upfront to secure professional services (like a lawyer), whereas a deposit is usually a security measure against damage or default.

Word family

depositor (noun): A person who keeps money in a bank.
deposition (noun): The action of deposing someone, or a formal statement used in court (legal), or the laying down of matter (geological).

Collocations

security deposit
refundable deposit
pay a deposit
hold a deposit

Example sentences

"The rental agency required a $300 security deposit on my credit card before they would hand over the keys." Renting a car at the airport.
"To secure the lease on the SUV, I had to pay the first month's rent plus a refundable deposit." Securing a lease agreement.

Memory hook

You 'deposit' money by 'putting it down' on the counter. Deposit = Down payment or hold.

When not to use

Do not confuse a 'security deposit' (which is fully refundable) with a 'down payment' (which is non-refundable and goes toward the purchase price).

Fun facts

In geology, 'deposit' refers to layers of minerals or sediment that have been 'laid down' by natural processes over millions of years, sharing the exact same Latin root of 'putting down'.