Term deposits are a savings product in which you deposit a sum of money with the bank for the specific period of time.
In other words, you loan money to the bank and the bank pays you the corresponding interest based on the amount and the term.
Term deposits offer a series of benefits and are therefore a very popular savings product:
A guaranteed return:
With term deposits, the return is agreed with the financial institution at the time of purchase, which means that you will know the interest you will earn before you deposit your money, based on the amount and the term.
Unlike the case with variable investments, term deposits offer a fixed remuneration throughout the life of the product Investment guaranteed by the Deposit Guarantee Fund. Term deposits offer a lower risk than other savings products and are also protected by the Deposit Guarantee Fund.
Purchasing a deposit is very fast and very easy:
You can purchase a deposit very easily and in a matter of minutes. Most banks let you purchase them online and since they are simple products you don't need an extensive knowledge of investing.
Flexible maturity date:
You decide how long you want to maintain the deposit. The conditions of a term deposit cannot be changed: as a product with a specific duration, banks cannot change any of the conditions agreed at the time of purchase.
Term deposits are a good option for conservative investors who are reluctant to take risks and who want guarantees for their investments. When purchasing a term deposit, it's important to be clear that you won't need the money for the agreed period because if you withdraw it early, you will have to pay a penalty.