Let’s tackle each of these separately. How Do Term Deposits Function? A term deposit is an investment product. It’s a deposit account at a financial institution that typically comes with a short-term maturity date—meaning that it matures (or is finished growing) in anywhere from one month to three years.
Is a term deposit a short-term or long-term deposit?
A term deposit of less than one year is considered a short-term term deposit. On the contrary, a term deposit of more than one year is known as a long-term term deposit. Also, term deposits can be redeemable or non-redeemable. With a redeemable term deposit, you can access your money before the end of your term.
What are the different types of term deposits?
Flexible: There are various types of term deposits you can choose from, including short-term term deposits, long-term term deposits, redeemable term deposits, and non-redeemable term deposits.
How long do term deposits last?
Although term deposits can lock up your money for a certain period of time, they are designed for short- to medium-term savings periods. Most term deposits have either short terms of 30 to 270 days or longer terms of one to five years. Term deposits come with various options for interest payment intervals.
