Both deposit and escrow are means of securing a transaction. It is paid by one party to another.
A deposit is an amount used to secure a transaction. It is paid by the depositor to the depository and returned when no longer needed.
An escrow is an amount used to facilitate a transaction. It is paid by the buyer to the escrow agent to be used for the elimination of some legal obstacle to the acquisition. It is not intended by the parties to be repaid but to be applied as required in the escrow agreement.
In summary, the difference is the purpose of paying some money to another and the purpose of such payment. Deposit is usually returned to the depositor after it is no longer needed, while an escrow, if the trnasaction is completed, goes to the seller and/or used as required, for example, to remove the mortgage from the property to be acquired by the buyer.
