# What is the difference between a surety bond and a cash deposit? *Reviewed 2026-05-15* ## Short answer Many license requirements let you either post a surety bond or deposit the full amount in cash with the regulator. A bond costs only a premium, a fraction of the amount, and keeps your capital free, while a cash deposit ties up the entire sum. The bond is usually the cheaper way to satisfy the same requirement. When a state sets a financial security requirement, it often accepts either form. A cash deposit means handing the regulator the full required amount, which then sits unavailable to your business, sometimes for years. A surety bond satisfies the same requirement for a premium that is a small percentage of the amount. The trade-off is that a bond comes with underwriting and indemnity, while a cash deposit does not. For most businesses, keeping working capital available makes the bond the practical choice. ## Related - [Surety bond services](/bonds) - [Contact our team](/contact)