Deposit Bonds — A Smarter Way to Secure Your Investment
A deposit bond allows you to secure your position without tying up your cash — keeping your capital working for you while the property is being built.
The Deposit Bond Process
Consultation
During your investment consultation, we assess whether a deposit bond is suitable for your circumstances. We explain the costs, terms, and obligations clearly.
Application
We prepare and submit your deposit bond application on your behalf. The process requires proof of your ability to complete the purchase at settlement.
Issuance
Once approved, the deposit bond is issued as a guarantee to the vendor or developer in lieu of a cash deposit. This typically takes just a few business days.
Settlement
At settlement, you pay the full purchase price as normal. The deposit bond is released, and the transaction is completed.
Why Use a Deposit Bond?
Preserve your capital
Keep your cash in offset accounts, investment vehicles, or high-interest savings while your property is under construction.
Move faster on opportunities
When a premium property becomes available, speed matters. A deposit bond lets you secure your position without waiting for funds to be rearranged.
Reduce opportunity cost
Rather than locking 10% of the purchase price in a trust account earning minimal interest, your capital remains liquid and productive.
Simple and cost-effective
Deposit bond premiums are typically a small fraction of the deposit amount — often less than the interest you'd earn by keeping your funds invested elsewhere.
No impact on borrowing capacity
A deposit bond is not a loan. It doesn't appear on your credit file and doesn't affect your ability to secure finance.
Is a Deposit Bond Right for You?
Deposit bonds are well suited to investors who:
- Are purchasing off-the-plan property with a settlement date 6 months or more in the future
- Have existing assets or pre-approval but prefer not to liquidate cash for a deposit
- Want to preserve liquidity across multiple investments or financial commitments
- Are experienced investors managing a portfolio and seeking capital efficiency
- Are self-managed super fund (SMSF) trustees navigating specific cash flow requirements
Deposit bonds may not be appropriate for every situation. Our team will assess your individual circumstances and advise whether this solution aligns with your strategy.
Deposit Bond FAQs
Is a deposit bond the same as a loan?
No. A deposit bond is a guarantee, not a debt. You do not borrow money, make repayments, or incur interest. The bond simply assures the vendor that you are committed to completing the purchase at settlement. You pay the full purchase price — including the deposit component — at settlement.
How much does a deposit bond cost?
The cost varies depending on the deposit amount and the term (the length of time between exchange and settlement). As a general guide, premiums typically range from 1.2% to 1.5% of the deposit amount per year of the bond's term. We provide an exact quote as part of your consultation.
Will the developer accept a deposit bond?
Most major developers accept deposit bonds, and all projects in the Property88 portfolio are deposit bond eligible. We confirm acceptance with the developer before you proceed.
What happens if the purchase doesn't settle?
If you fail to complete the purchase at settlement, the vendor can make a claim against the deposit bond. This means you would be liable for the deposit amount, just as you would be with a cash deposit. It is important to ensure you have a clear path to settlement before entering into any contract.
Secure Your Next Investment — Without Locking Up Your Capital
Property88 makes the deposit bond process straightforward. Get in touch with our team to find out if a deposit bond is the right move for your next property investment.