Time Deposit

Posted in Finance, Accounting and Economics Terms, Total Reads: 419

Definition: Time Deposit

Time Deposit refers to an instrument of saving-a savings account or certificate of deposit that provides a fixed rate of interest until a predetermined maturity date. Money deposited in a Time Deposit cannot be withdrawn before maturity .An advanced notice might be given to withdraw the amount before maturity and a penalty is also attached with the same.

The rate of interest on the Term deposit depends on the following two criteria

1. The length of the deposit or the term of the deposit. The higher the term, the greater us the interest rate

2. The amount of the deposit, the greater the amount the better are the interest terms

Uses of a Time Deposit:

1. Time Deposit are used by individuals, businesses and financial institutions for storing money in the form of a liquid instrument which provides interest for a fixed period of time

2. Time Deposits are relatively safe investments as they are mostly provided by credible and insured institutions which are regulated.

Various names which time deposits have are:

a. time deposit -Philippines, Japan and China

b. term deposits -Australia, Canada and New Zealand

c. fixed rate bonds – UK

d. certificates of deposit (CD) - United States

e. fixed deposits -South Africa.



Looking for Similar Definitions & Concepts, Search Business Concepts

Similar Definitions from same Category: