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time deposit
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time deposit

finance
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Quick Summary

A time deposit is a type of bank account where money is deposited for a specific period, known as the maturity date. Unlike demand deposit accounts, which allow immediate withdrawal, time deposits are intended to be held until maturity.12

Key features of time deposits include:
* Interest: They typically earn a higher interest rate than regular savings accounts.1
* Maturity Date: Funds are payable on or after a predetermined date.1
* Withdrawal Penalties: Withdrawing funds before the maturity date usually results in a loss of accrued interest, often equivalent to several months' worth.1

These accounts are commonly referred to as Certificates of Deposit (CDs) when held by retail investors. In the United States, bank-issued CDs are insured by the Federal Deposit Insurance Corporation (FDIC) up to a certain limit per depositor.1

Summary created from Britannica articles using AI. AI can make mistakes, so verify using Britannica articles.
2 Britannica Sources
  1. certificate of deposit
  2. deposit account

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