EARNEST MONEY DEPOSIT
1) In simple words, it's one kind of security deposit.
2) It's taken to know the seriousness of the buyers.
3) It's called
Good Faith Deposit
Token Amount
Bid Bond
Bid Security
Tender Security
4) Generally, it is 1 or 2 per cent of the transaction amount.
5) For Example
If the tender amount is 10 Lakhs.
EMD amount will be around 20000.
6) EMD used in Tender Bidding Process and Real Estate.
7) Buyer will get a receipt after giving EMD to the seller.
8) In the Bidding process, EMD is very important. It's helpful to find out the seriousness of bidders.
9) EMD is given in the form of Demand Drafts, Bankers Cheques or Irrevocable and unconditional Bank Guarantee.
10) EMD is not accepted in the form of cash and cheques.
11) EMD is returned when all the bids are opened or in case of tender is cancelled.