Deposit

A term deposit is a fixed-term investment that includes the deposit of money into an account at a financial institution.

What Is a Term Deposit?

A term deposit is a fixed-term investment that includes the deposit of money into an account at a financial institution. Term deposit investments usually carry short-term maturities ranging from one day to a few months and will have varying levels of required minimum deposits.

The investor must understand when buying a term deposit that they can withdraw their funds only after the term ends. In some cases, the account holder may allow the investor early termination — or withdrawal — if they give several days notification. Also, there will be a penalty assessed for early termination.

DFI entities usually use the term duration of 24 hours.