What is Term Deposit, Term Deposit Vs Fixed Deposit

A term deposit is a large sum of money that you give to a bank or financial institution for a fixed period of time. The money is guaranteed to be safe, and you earn interest on it. You can choose the amount of your investment and the length of time you want it held. Term deposits are usually low risk but have lower returns than other investments, as they pay out a set interest rate over their nominated period. Read on to find out Term Deposit Vs Fixed Deposit, how they work, and how much you can expect to earn.


What is Term Deposit


A term deposit is an investment in a savings account in which the investor gives the bank a fixed sum of money, and the bank keeps it locked away for a certain length of time. The bank will usually pay interest on it during that period, unlike a checking account where your money is used as working capital.


Fixed Deposit vs Term Deposit


Fixed Deposit vs Term Deposit: the main difference between the two investment-saving instruments is that a Fixed deposit is an investment that generally gives higher interest rates compared to a term deposit. A term deposit is a fixed deposit but with a pre-specified lock-in period of time during which you cannot withdraw the money.


Key Features of Term Deposit 

Term deposits are fixed-term loans, where the loan interest rate and term of the loan are fixed for the duration of the term. The amount is guaranteed to be repaid in full at maturity, with no risk of default by either party.


With the fluctuation in market interest, there is a rise in deposit rates too. If a bank offers a high return on term deposits, the consumers are more likely to invest in them. In addition to this, banks have to offer higher interest in order to attract customers.


Benefits of Term Deposit


A term deposit is a fixed-term deposit product that allows you to save money with a financial institution for a specified period of time. This payout structure provides both the borrower and lender with benefits through guaranteed interest, protection against inflation, and sometimes tax-free earnings.


Guaranteed return of term deposit


A guaranteed return on a term deposit is an investment offered by banks and credit unions. Investors can earn interest at a rate that is fixed for the duration of their investment. A guaranteed return of term deposit helps investors plan and save for major purchases, fund a child’s education, or build retirement savings.


You may also like to know about  – Online fixed deposits calculator


Fixed remuneration of term deposit


Fixed remuneration term deposits are interest-bearing accounts with a fixed rate, which can be opened and operated by an individual or a business. Commercial banks, cooperative banks, and post office savings banks offer these deposits in the interbank market.


Purchasing a term deposit is easy and quick


If you’re looking for a simple, straightforward way to keep your funds safe, then a term deposit is an ideal investment. You can choose from a range of fixed-term interest rates and terms, so you can find the right product to suit your circumstances and financial goals. There are no fees associated with our term deposits, making them very cost-effective.


Flexible date of maturity 


Term deposits allow you to lock in a higher interest rate for a longer period. They are suitable for saving long-term and are flexible, with no penalties if you want to withdraw early–the interest is paid monthly, quarterly or yearly (depending on the term).


A great option for the conservative and low-risk investors


This term deposit is a great option for conservative and low-risk investors. It offers good rates, easy access, and liquidity. This account has specific unlocking requirements to avoid penalizing investors who want to withdraw their money early.


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