The deposit is distinct from the down payment. It moves first, as soon as the offer is accepted, and it is simply credited against your down payment at possession rather than being an extra cost on top of it.
A stronger deposit can signal seriousness in a competitive multiple-offer situation, but it should never exceed what you are prepared to lose if a condition genuinely cannot be met, since a lawyer reviews the offer's condition wording before anything is released.
Joel Dyck helps buyers set a deposit that fits the offer strategy without overexposing them. Get your hand-reviewed valuation from Joel Dyck.