What is a deposit bond and can I use one instead of cash?

Short answer: An insurance policy guaranteeing deposit payment. Not widely accepted in NZ. Cash is preferred.

What this actually means in plain English

A deposit bond is an insurance policy that guarantees you will pay the deposit at settlement. You pay a small fee instead of tying up cash. Not all sellers accept them. They are more common in Australia than New Zealand. Most NZ sales require actual cash deposits.

Key Facts

Deposit bond = insurance, not actual cash
Fee is typically 1-2% of deposit amount
Not commonly accepted in New Zealand
More common in Australia and commercial property

Example

Deposit Amount: $30,000

Bond Fee: $300-$600 (1-2%)

Cash Alternative: Pay $30,000 upfront

Nz Common: Cash deposit standard

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