diff --git a/core/model/src/driver.rs b/core/model/src/driver.rs
index 1ccb7cb96e..27ccbb9ec9 100644
--- a/core/model/src/driver.rs
+++ b/core/model/src/driver.rs
@@ -403,7 +403,8 @@ impl ValidateAllocation {
 
 #[derive(Clone, Debug, Serialize, Deserialize)]
 pub enum ValidateAllocationResult {
-    InsufficientFunds,
+    InsufficientAccountFunds,
+    InsufficientDepositFunds,
     TimeoutExceedsDeposit,
     MalformedDepositContract,
     MalformedDepositId,
diff --git a/core/payment-driver/erc20/src/driver.rs b/core/payment-driver/erc20/src/driver.rs
index 166d170447..83a3e03a74 100644
--- a/core/payment-driver/erc20/src/driver.rs
+++ b/core/payment-driver/erc20/src/driver.rs
@@ -407,7 +407,7 @@ impl Erc20Driver {
         );
 
         Ok(if msg.amount > account_balance - total_allocated_amount {
-            ValidateAllocationResult::InsufficientFunds
+            ValidateAllocationResult::InsufficientAccountFunds
         } else {
             ValidateAllocationResult::Valid
         })
@@ -504,7 +504,7 @@ impl Erc20Driver {
                 deposit_balance
             );
 
-            return Ok(ValidateAllocationResult::InsufficientFunds);
+            return Ok(ValidateAllocationResult::InsufficientDepositFunds);
         }
 
         if let Some(timeout) = msg.timeout {
diff --git a/core/payment/src/api/allocations.rs b/core/payment/src/api/allocations.rs
index 503bc07af6..c783fc4375 100644
--- a/core/payment/src/api/allocations.rs
+++ b/core/payment/src/api/allocations.rs
@@ -346,10 +346,15 @@ async fn create_allocation(
 
     match async move { Ok(bus::service(LOCAL_SERVICE).send(validate_msg).await??) }.await {
         Ok(ValidateAllocationResult::Valid) => {}
-        Ok(ValidateAllocationResult::InsufficientFunds) => {
+        Ok(ValidateAllocationResult::InsufficientAccountFunds) => {
             return bad_req_and_log(format!("Insufficient funds to make allocation for payment platform {payment_triple}. \
                 Top up your account or release all existing allocations to unlock the funds via `yagna payment release-allocations`"));
         }
+        Ok(ValidateAllocationResult::InsufficientDepositFunds) => {
+            return bad_req_and_log(
+                "Insufficient funds on the deposit for this allocation".to_string(),
+            );
+        }
         Ok(ValidateAllocationResult::TimeoutExceedsDeposit) => {
             return bad_req_and_log(
                 "Requested allocation timeout either not set or exceeds deposit timeout"
@@ -522,10 +527,15 @@ async fn amend_allocation(
     };
     match async move { Ok(bus::service(LOCAL_SERVICE).send(validate_msg).await??) }.await {
         Ok(ValidateAllocationResult::Valid) => {}
-        Ok(ValidateAllocationResult::InsufficientFunds) => {
+        Ok(ValidateAllocationResult::InsufficientAccountFunds) => {
             return bad_req_and_log(format!("Insufficient funds to make allocation for payment platform {payment_triple}. \
                 Top up your account or release all existing allocations to unlock the funds via `yagna payment release-allocations`"));
         }
+        Ok(ValidateAllocationResult::InsufficientDepositFunds) => {
+            return bad_req_and_log(
+                "Insufficient funds on the deposit for this allocation".to_string(),
+            );
+        }
         Ok(ValidateAllocationResult::TimeoutExceedsDeposit) => {
             return bad_req_and_log(
                 "Requested allocation timeout either not set or exceeds deposit timeout"