Deposit Protect Bonds

You have found the right property! Now all that is left for you to do is find the deposit funds to secure that new dream home.

Many home buyers lodge a cash deposit to secure a home, which means you could incur an interest rate penalty for breaking a fixed term investment, or lose valuable interest income.

To ensure you keep earning an income on your deposit monies right up to the day of settlement, there is a better way to secure your dream home.

What is a Deposit Protect Bond?

A BankSA Deposit Protect Bond acts as a substitute for a cash deposit on a home or investment property purchase. The bond can be written for up to 10% of the contract price and it is then handed to the vendor’s solicitor or agent at exchange of contracts.

A BankSA Deposit Protect Bond is a guarantee from BankSA. For a nominal fee, a BankSA Deposit Protect Bond guarantees the vendor that the purchaser will pay the deposit, in addition to all other monies payable under the contract, on the day of settlement.

At settlement, the full purchase price for the property (including the deposit amount) is paid, and the bond obligation is cancelled.

What are the advantages of using a Deposit Protect Bond?

A Deposit Protect Bond is:

Ideal for securing a new home or investment property when utilising equity in an existing property to finance the purchase
Perfect when you don’t have ready access to cash for the deposit
Convenient when attending auctions
Inexpensive and quick – in most cases a bond can be approved within two hours
Flexible – a bond can be utilised to secure a variety of properties (i.e. owner occupied, investment, vacant land, commercial properties and company applicants)

Note: Conditions Apply

What documents do I need to provide?

You must provide evidence of funds to complete the purchase transaction. To enable us to issue a BankSA Deposit Protect Bond as quickly as possible, we may also require the documents listed below, as they apply to your circumstances. Additional information may be requested from your real estate agent or solicitor.

A BankSA Deposit Protect Referral form is available by calling the Deposit Bond Team on 1300 301 004 or from your local BankSA Branch
A copy of the Contract of Sale of the property you are purchasing
A copy of your BankSA loan approval or other bank loan approval
If your purchase is being funded by the sale of another property and that property has been sold, a copy of that Contract of Sale together with your latest loan summary statement for any existing mortgages (if applicable)
If you are a first time purchaser, a copy of your completed Application for First Home Owners Grant or Office of State Revenue approval letter
If you are contributing other funds towards your purchase, evidence of those funds are required (i.e. savings account statement – must be held in an Australian bank account; savings held in the form of shares is not acceptable)
If you are purchasing in a company name, you will need to provide a copy of an up to date company search. You will also need to complete a Company Guarantee & Indemnity form which you can obtain by calling the Deposit Bond Team on 1300 301 004.

Why use a BankSA Deposit Protect Bond?

Conveyancing practice in Australia requires that a deposit be paid upon a purchaser entering into, or exchanging contracts for a property. This deposit is typically sourced from the purchaser’s own savings or additional borrowings. The BankSA Deposit Protect Bond removes the need for the purchaser to find the deposit in this manner.

Who receives the BankSA Deposit Protect Bond?

The Deposit Protect Bond (or Guarantee) is handed to the solicitor or the estate agent to complete the exchange of contracts.

Does the deposit still have to be paid at settlement?

Yes. The bond acts as a substitute for all or part of the deposit enabling the purchaser to enter into a contract more quickly. It does not remove the obligation to pay this money when the contract is settled.

What happens at settlement?

Once settlement has occurred, the bond expires.

If the purchaser defaults under the Contract of Sale and the vendor is entitled to retain the deposit, the vendor can claim the deposit amount guaranteed from BankSA. BankSA must be provided with the necessary documents detailed on the BankSA Deposit Protect Bond document.

BankSA will recover from the purchaser the deposit paid by BankSA on the purchaser's behalf.

For how long is a BankSA Deposit Protect Bond valid?

A BankSA Deposit Protect Bond is valid for 26 weeks (6 months) from the date of issue. The Deposit Protect Bond expires when the Contract of Sale is completed, terminated, rescinded or the expiry date occurs, whichever happens first.

BankSA Deposit Protect Bonds are issued and guaranteed by BankSA - A Division of Westpac Banking Corporation ABN 33 007 457 141 AFSL 233714.

Deposit Protect Bonds