A holding deposit is money given to a landlord by a prospective tenant to hold the property until the tenancy is signed as a sign of commitment. It is often advisable for a tenant to be certain about the property before paying a holding deposit. Holding deposits are not required to be protected and are often returned after the agreement is signed. Sometimes, they are used as a part of the tenancy deposit, after which they would require protection.
It is also important to be clear about the terms attached to the holding deposit, how it will be used, and the conditions for a refund.