Earnest money/ tender deposit
If you have applied in a tender, it's almost impossible that you would not have heard the term "earnest money deposit". It's nothing but the amount that a buyer gives to the seller to show his inclination in successfully completing a deal. If the amount involved is rather large then an escrow account is opened and the money is held in the same account. In the case of tender, the amount is made known well in advance, during the launch of a tender.
For example, Company XYZ may ask for an earnest money deposit from the bidder for a roads project.
The sum would depend on the company and in many cases the deposit could be large if the contract is large. In case a tender has not been awarded then the company that had collected the amount has to refund the same. Generally, there is no interest that is applicable on the earnest money deposit amount in India. The practice of taking this deposit amount is very much prevalent in the West.
In fact, very few transactions can be completed without an earnest money deposit. The amount of money you pay is a percentage of the property may vary from seller to seller, but, on an average it is estimated that the earnest money deposit could be easily around per cent of the property value.
As mentioned earlier if the transaction does not go through the amount would have to be refunded.
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Insist on a clause that has a refund, even it means a small cancellation fee that is charged. If you find problems with the property, you should insist on getting the money back. In some cases where the earnest money deposit is rather large, a buyer may reduce the price of a home.
No, Earnest Money Deposit is not a part of Down Payment.
Earnest money deposit is for displaying your commitment towards the project to the seller. Down payment means the initial payment you do while you are buying something on credit.
It can be a property or vehicle or anything.
For example, f you are buying a bike worth eighty thousand and you are paying twenty thousand while buying and rest you will be paying in installments. In this, the twenty thousand you paid is called as down Payment. The main difference between an Earnest Money Deposit and Down payment is, Earnest Money Deposit is like taking time from client inorder to buy some time to find the money required to complete the transaction and the down payment is the payment done with the necessary funds to complete the transaction.
In a way, Earnest Money Deposit turns into down payment if you have sufficient funds to start the project. Many a times it is highly possible, that there could be a dispute that could arise on account of earnest money deposits in india. This is largely because of worries over delay in returning the money or a breach somewhere down the line.
It is important that the dispute be resolved amicably.
Security Deposit and Earnest Money: Amendment in PWD Code | WBXPress
Sometimes, if the money is large it could boil down to several difficulties in getting the money back. Oneindia Classifieds Coupons Education News Movies Insurance Auto Cricket Gadgets Lifestyle Money Travel.
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WHAT IS EARNEST MONEY DEPOSIT
USD to INR USD to EUR USD to GBP USD to Dirham USD to Saudi Riyal USD to Qatari Riyal USD to CAD USD to ZAR USD to JPY USD to AUD USD to MYR USD to CHF USD to SGD USD to ARS USD to AWG USD to BAM USD to BBD USD to BDT USD to BGN USD to BHD USD to BMD USD to BOB USD to BRL USD to BSD. EUR to INR EUR to USD EUR to GBP EUR to Dirham EUR to Saudi Riyal EUR to Qatari Riyal EUR to CAD EUR to ZAR EUR to JPY EUR to AUD EUR to MYR EUR to CHF EUR to SGD EUR to ARS EUR to AWG EUR to BAM EUR to BBD EUR to BDT EUR to BGN EUR to BHD EUR to BMD EUR to BOB EUR to BRL EUR to BSD.
AED to INR AED to USD AED to GBP AED to EUR AED to Saudi Riyal AED to Qatari Riyal AED to CAD AED to ZAR AED to JPY AED to AUD AED to MYR AED to CHF AED to SGD AED to ARS AED to AWG AED to BAM AED to BBD AED to BDT AED to BGN AED to BHD AED to BMD AED to BOB AED to BRL AED to BSD. SAR to INR SAR to USD SAR to GBP SAR to EUR SAR to AED SAR to Qatari Riyal SAR to CAD SAR to ZAR SAR to JPY SAR to AUD SAR to MYR SAR to CHF SAR to SGD SAR to ARS SAR to AWG SAR to BAM SAR to BBD SAR to BDT SAR to BGN SAR to BHD SAR to BMD SAR to BOB SAR to BRL SAR to BSD.
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