Time deposits

Definition

Time deposits are savings accounts or certificates of deposit (CDs) in financial institutions that have a fixed term and typically offer higher interest rates than regular savings accounts. Withdrawals before the term ends may result in penalties.

Related terms

Savings Account: A bank account where individuals can deposit money to earn interest over time, usually with more flexibility compared to time deposits.

Certificate of Deposit (CD): A type of time deposit held at a bank or financial institution with a fixed maturity date and agreed-upon interest rate, offering less liquidity in exchange for higher interest rates.

Interest Rate: The percentage at which interest is paid by borrowers for the use of money they borrow from lenders, also applied to the earnings on savings accounts and time deposits