A type of savings account designed to guarantee interest on the funds deposited is called a time deposit. You deposit your money in one lump sum into an account with a fixed rate of interest, which is better than saving and you know it’s safe.
How does term savings work?
You deposit the available funds into the account in one lump sum for a predetermined period of time. The deposit cannot be increased and the money invested in the time deposit cannot be transferred to other accounts or paid with.
Comparison of time deposits
When choosing the best term deposit, the interest rate is particularly important; both banks and credit unions offer term deposits. Depending on the agreed length of the deposit, term deposits are divided into:
- Short-term time deposits concluded for a few weeks to a year,
- Medium-term term deposits for 2 to 4 years,
- Long-term term deposits for 5 years or more.
Depending on the method of termination, they are further divided into one-time (without renewal) and cyclic (with renewal).