Term Deposit
A deposit locked for a fixed period at a guaranteed interest rate, usually higher than an instant-access account.
A term deposit pays a fixed, often higher rate in exchange for committing your money for a set period, from a few months to several years. Withdrawing early typically means losing some or all of the interest. It suits money you are sure you will not need until the term ends, offering certainty but no flexibility. In a falling-rate environment it locks in a good rate; in a rising one it can trap you below market. Always weigh the guaranteed return against the loss of access.
Example
You lock $20,000 in a 1-year term deposit at 5%, guaranteeing $1,000 of interest, provided you do not withdraw before the year is up.
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Related terms
Savings Account
A bank account that pays interest on your balance while keeping the money easily accessible.
Liquidity
How quickly and easily an asset can be turned into cash without losing value.
Interest Rate
The percentage charged on borrowed money or earned on deposited/invested money, expressed as an annual rate.
Inflation
The rate at which the general price level of goods and services rises over time, reducing the purchasing power of money.
Explore more terms
Transaction Categorization
The process of classifying financial transactions into categories like groceries, rent, or entertainment to analyze spending patterns.
Recurring Transactions
Transactions that repeat at regular intervals — subscriptions, loan payments, salary deposits — essential for predicting future cash flow.
Bank Synchronization
The automated process of importing transactions from bank accounts into a financial management tool, either through API connections or file imports.
APR (Annual Percentage Rate)
The annualized cost of borrowing expressed as a percentage, including interest and mandatory fees, used to compare loan products.
IBAN
International Bank Account Number, a standardized format for identifying bank accounts across borders.
Overdraft
A credit facility that lets you spend more than your account balance, up to an agreed limit, for a fee or interest.