Term Deposit Account
In deposit terminology, the phrase Term Deposit Account refers to a particular type of savings account in which deposits are left for a pre-determined period of time or term. A Term Deposit Account generally pays out a fixed rate of interest.
For example, a deposit made into a Term Deposit Account offered by many financial institutions, is subject to remaining in the account until a specified maturity date or term. Term Deposit Accounts are generally for short term investments with terms typically ranging between one month and ten years. Term Deposit Accounts generally assess a penalty for early withdrawal, requiring advance notice in many cases. These types of accounts also pay a higher rate of interest than demand deposit or other types of savings accounts. Individuals, businesses and financial institutions use Term Deposit Accounts as a store of wealth for liquid funds not in use.