What it is
A time deposit is a bank deposit product that earns interest at a fixed rate like other types of bank accounts.
The main difference is that your money will be locked in for a certain period, called its term. Withdrawing early typically comes with fees.
You'll get back your deposit plus the interest earned when the term ends and your time deposit reaches maturity.
What it means for you
You can put money in a time deposit if you want to grow it at a predictable rate and without taking on too much risk.
Since you can't partially withdraw during the term, time deposits tends to offer higher interest than regular savings accounts.
It is seen as a safe investment option that even risk-averse individuals can consider since time deposits are covered by deposit insurance.
This means that if the bank closes, you’ll still get your money back if the deposit account meets certain conditions.
You can invest in time deposits through banks, and some allow you to make placements online.
