Timing is the clearest way to tell them apart. A deposit moves within days of an accepted offer and is held under the trust rules Information Services Corporation and a real estate lawyer both rely on for title and closing, well before financing or a home inspection is finalized, while the down payment moves at possession alongside the lawyer's final trust accounting.
If a deal falls through on a legitimate condition, the deposit is returned; if it collapses without one, the seller may have a claim to keep it, which is exactly why a lawyer should review the condition wording before an offer is signed rather than after.
Joel Dyck walks buyers through both amounts before an offer goes in, so there are no surprises at possession. Get your hand-reviewed valuation from Joel Dyck.