diff --git a/programs/mango-v4/src/instructions/serum3_place_order.rs b/programs/mango-v4/src/instructions/serum3_place_order.rs
index c20a15e47..55af21d91 100644
--- a/programs/mango-v4/src/instructions/serum3_place_order.rs
+++ b/programs/mango-v4/src/instructions/serum3_place_order.rs
@@ -316,18 +316,13 @@ pub fn serum3_place_order(
         )?
     };
 
-    // Deposit limit check: Placing an order can increase deposit limit use on both
-    // the payer and receiver bank. Imagine placing a bid for 500 base @ 0.5: it would
-    // use up 1000 quote and 500 base because either could be deposit on cancel/fill.
-    // This is why this must happen after update_bank_potential_tokens() and any withdraws.
+    // Deposit limit check, receiver side:
+    // Placing an order can always increase the receiver bank deposits on fill.
     {
         let receiver_bank = receiver_bank_ai.load::<Bank>()?;
         receiver_bank
             .check_deposit_and_oo_limit()
             .with_context(|| std::format!("on {}", receiver_bank.name()))?;
-        payer_bank
-            .check_deposit_and_oo_limit()
-            .with_context(|| std::format!("on {}", payer_bank.name()))?;
     }
 
     // Payer bank safety checks like reduce-only, net borrows, vault-to-deposits ratio
@@ -342,6 +337,18 @@ pub fn serum3_place_order(
         );
         payer_bank.enforce_max_utilization_on_borrow()?;
         payer_bank.check_net_borrows(payer_bank_oracle)?;
+
+        // Deposit limit check, payer side:
+        // The payer bank deposits could increase when cancelling the order later:
+        // Imagine the account borrowing payer tokens to place the order, repaying the borrows
+        // and then cancelling the order to create a deposit.
+        //
+        // However, if the account only decreases its deposits to place an order it can't
+        // worsen the situation and should always go through, even if payer deposit limits are
+        // already exceeded.
+        payer_bank
+            .check_deposit_and_oo_limit()
+            .with_context(|| std::format!("on {}", payer_bank.name()))?;
     } else {
         payer_bank.enforce_borrows_lte_deposits()?;
     }
diff --git a/programs/mango-v4/tests/cases/test_serum.rs b/programs/mango-v4/tests/cases/test_serum.rs
index 90713303b..123851241 100644
--- a/programs/mango-v4/tests/cases/test_serum.rs
+++ b/programs/mango-v4/tests/cases/test_serum.rs
@@ -1563,6 +1563,7 @@ async fn test_serum_deposit_limits() -> Result<(), TransportError> {
     //
     let deposit_amount = 5000; // for 10k tokens over both order_placers
     let CommonSetup {
+        serum_market_cookie,
         group_with_tokens,
         mut order_placer,
         quote_token,
@@ -1677,11 +1678,15 @@ async fn test_serum_deposit_limits() -> Result<(), TransportError> {
     let remaining_quote = {
         || async {
             let b: Bank = solana2.get_account(quote_bank).await;
-            b.remaining_deposits_until_limit().round().to_num::<u64>()
+            b.remaining_deposits_until_limit().round().to_num::<i64>()
         }
     };
 
     order_placer.cancel_all().await;
+    context
+        .serum
+        .consume_spot_events(&serum_market_cookie, &[order_placer.open_orders])
+        .await;
 
     //
     // TEST: even when placing all quote tokens into a bid, they still count
@@ -1705,6 +1710,43 @@ async fn test_serum_deposit_limits() -> Result<(), TransportError> {
     assert_mango_error(&r, MangoError::BankDepositLimit.into(), "dep limit".into());
     order_placer.try_ask(5.0, 399).await.unwrap(); // not 400 due to rounding
 
+    // reset
+    order_placer.cancel_all().await;
+    context
+        .serum
+        .consume_spot_events(&serum_market_cookie, &[order_placer.open_orders])
+        .await;
+    order_placer.settle().await;
+
+    //
+    // TEST: can place a bid even if quote deposit limit is exhausted
+    //
+    send_tx(
+        solana,
+        TokenEdit {
+            group: group_with_tokens.group,
+            admin: group_with_tokens.admin,
+            mint: quote_token.mint.pubkey,
+            fallback_oracle: Pubkey::default(),
+            options: mango_v4::instruction::TokenEdit {
+                deposit_limit_opt: Some(1),
+                ..token_edit_instruction_default()
+            },
+        },
+    )
+    .await
+    .unwrap();
+    assert!(remaining_quote().await < 0);
+    assert_eq!(
+        account_position(solana, order_placer.account, quote_token.bank).await,
+        5000
+    );
+    // borrowing might lead to a deposit increase later
+    let r = order_placer.try_bid(1.0, 5001, false).await;
+    assert_mango_error(&r, MangoError::BankDepositLimit.into(), "dep limit".into());
+    // but just selling deposits is fine
+    order_placer.try_bid(1.0, 4999, false).await.unwrap();
+
     Ok(())
 }