Term Deposit
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Term Deposit

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The funds in a term deposit remain locked and cannot be withdrawn until the maturity date without incurring penalties.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.

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