Time deposit

What is a time deposit? Time deposits are savings products where the customer deposits a certain amount of money at a financial institution for a specific period of time. Once this term has expired, the entity returns the deposit along with an agreed-upon amount of interest. It is most common for time deposits to have fixed interest rates. Their yield, which is the profit, remains invariable until the end of the deposit's term.

The nominal interest rate or NIR represents the yield that the bank offers for the money invested in a deposit over a certain term. A bank will typically offer a higher interest rate if the contracted deposit is for a longer term. The Annual Percentage Rate or APR is the effective yield from the deposit, since this figure includes interest, expenses, and fees. It allows products from different banks to be more easily compared.

In the next video we tell you what a bank deposit is, how interest works, the core concepts of term deposits and the types of deposits there are. Learn how your return is calculated and associated expenses there may be.

What is a time deposit?