Term Deposit
Table of Contents:
Definition of Term Deposit
Term deposit, also known as a fixed deposit or time deposit, refers to a financial arrangement offered by banks and financial institutions where a customer deposits a specific amount of money for a predetermined period at a fixed interest rate.
The funds in a term deposit remain locked and cannot be withdrawn until the maturity date without incurring penalties.
It is a low-risk investment option that provides a guaranteed return and is favored by individuals and businesses seeking to preserve capital and earn a fixed interest income over a defined period.
What is Term Deposit?
A term deposit is a secure investment product offered by banks, allowing customers to deposit a lump sum of money for a specified term, commonly ranging from a few months to several years.
The funds in a term deposit cannot be accessed before the maturity date without facing early withdrawal penalties. In return for committing their funds for the agreed term, investors receive a fixed interest rate that remains constant throughout the deposit's tenure.
Term deposits are considered a conservative and stable investment choice, appealing to risk-averse individuals seeking to earn predictable returns while protecting their capital from market fluctuations.
