What is a Bank Term Deposit?

Term deposits can be an excellent way to save for a particular goal. They offer a higher interest rate than savings accounts and are often insured by the FDIC or NCUA, meaning your money is protected from bank failure.

What is term deposit in banks?

Whether you’re saving for an unexpected lump sum or a planned holiday, term deposits can be a great option. These accounts are also a good choice for those who have a tendency to dip into their savings, since the rate of interest you earn will not change over the course of the deposit period. Useful source

A term deposit is a form of fixed investment where the bank holds your funds for a set period of time, usually for one year or longer. It earns a guaranteed interest rate until the term is up, but it cannot be withdrawn before maturity.

These types of accounts are not always the best choice, however. For instance, they don’t keep up with inflation so you may not be earning enough to compensate for rising prices.

It’s important to read the terms and conditions carefully before signing up for a term deposit. You should know if you can break the deposit before it ends and what penalties you might face. If you do break the deposit, check with your bank before withdrawing any of your money.