What is a Term Deposit?
There are many different types of savings accounts available, all of which are there to make your money grow. With the improvement of online banking services over the past 5 years, the most popular savings account these days is an online savings account. These accounts have been brought on by the increased use of the internet from the general public as well as financial institutions and lenders. As the name suggests it is an account whereby all transactions (deposits and withdrawals) must be conducted electronically via the internet. They are lucrative to run, and can therefore be offered with higher interest rates than most traditional savings accounts. A term deposit is also another type of savings account. It works differently from a regular online savings account as money is invested at a fixed rate and for a fixed period of time. The average ‘term’ of investment can be anywhere from 30 days to 5 years. During this time it is possible to withdraw funds if necessary, however, this s
A term deposit is a fixed investment of currency into a financial institution with a set time limit as to when it can be withdrawn. “Term deposit” is referenced more frequently in Australia, Canada and New Zealand, while the term “time deposit” is more common in the United States and European countries. A term deposit investment is a non-liquid savings product with a short-term maturity date, ranging from a few months to a few years. Because of this fixed term, the financial institution will pay a higher interest rate than a liquid (or demand) deposit savings account. These low-risk instruments are very safe and serve as an appealing alternative for the conservative investor. The most common form of term deposit is a Certificate of Deposit (CD). They generally have maturity dates of 1 month to 5 years. CDs are part of the M2 money supply and are issued as part of the primary market (new issue) or secondary market (issues sold to another party). In the United States, the Federal Deposit
A term deposit is a savings product from an Authorised Deposit-taking Institution (ADI) – that is, a bank, credit union or building society. Your money is locked away for a fixed term and you get a stated rate of interest for that fixed term. Remember: only ADIs can offer term deposits – visit the Australian Prudential Regulation Authority website (www.apra.gov.au) to check the official list of ADIs. 2. Why would I want a term deposit? A term deposit is a secure investment – there’s virtually no risk of losing your money. You should also get a relatively high rate of return, especially compared with a regular transaction account. You get certainty with a term deposit compared to other ADI savings accounts, because the interest rate is fixed for the term you’ve selected. Interest in other ADI accounts (including online accounts) is variable which means it can go up and down. 3. Are term deposits guaranteed by the government? Yes, term deposits are guaranteed by the government under the
A term deposit is virtually identical to a Guaranteed Investment Certificate (GIC). It is an instrument issued to borrow funds, and backed by the general creditworthiness of the corporation issuing it. No property is pledged as collateral for a term deposit. Term deposits are available in both a Registered form (RSP) and a non-Registered form. Are MCAN term deposits eligible for CDIC deposit insurance? Yes, MCAN is a licensed deposit-taking institution and is a member of the CDIC. Our term deposits are insured pursuant to the standard terms of coverage set out by CDIC, up to $100,000 per account. For more information, please consult this brochure or contact CDIC at 1-800-461-2342 or our Customer Service Department at 1-800-387-9096. Is there a minimum dollar amount required for term deposit purchases? Yes, MCAN has a minimum dollar amount, which varies by term. Our minimum amount for a short term term deposit (less than 1 year) is $10,000.00. Our minimum amount for a long-term term dep
