Term Deposits

Term Deposits involve putting cash into a savings account with a financial institution that pays a fixed rate of interest until a set maturity date. Funds cannot generally be withdrawn during the time frame covered by the Term Deposit unless a penalty is paid.

What are the different types of term deposits around the world?

A Term Deposit is the popular name used for a savings product in Australia, New Zealand and Canada, but they are used throughout the world by both consumers and businesses to store cash for the future. Term Deposits are also known as Certificates of Deposit in the United States, bonds in the United Kingdom and Fixed Deposits in India and some other countries.

Which companies provide term deposits?

The financial institutions that provide term deposits include banks, savings and loan companies and credit unions. They are usually required to follow the regulations pertaining to their locale.

What is the risk of term deposits?

Term Deposits can be made for anywhere between 30 days and more than a year. The risk involved in making a Term Deposit is quite low if it is insured by a deposit insurance organization like the Federal Deposit Insurance Corporation or FDIC in the United States.

What are the rates of return for term deposits?

The returns on Term Deposits tend to be greater than rates paid on a simple savings or checking accounts due to the relative unavailability of one’s funds, but they usually yield less than riskier investments like stocks or bonds.