Also referred to fixed deposits (FD), or bank deposits, it is your money held typically at a bank, for a fixed period or term. Time deposits , usually offer a higher rate of interest than regular savings accounts, until the specified maturity date. While they differ from savings accounts, they are a great way to save and grow your excess, investible funds - minus the interest rate risk that comes with market investments.
Many assume time deposits are long-term, locked up and fixed for years. In fact, term deposits offer both short term and long-term products, with flexibility. The period can range from as low as one month to 12 months or longer to suit your needs. Such deposits earn interest ranging from 0.20% to 0.30% based on the currency, tenor, type of TD, for placing your money for a fixed term and returns.
The interest is credited to your regular current or savings account every month, 'compounded' or added back to the initial amount. Usually, the longer you park your money, the more interest they accrue, effectively making your funds work for you. There are different types of TDs available, with each one catering to a specific requirement, depending on the scheme you chose.
Here are five great benefits of opening a time deposit account:
Risk and returns go hand in hand. Compared to savings or current accounts or other volatile investments such as stocks, property, gold - investing in fixed term deposits offers guaranteed returns, safety and peace of mind. You can invest a fixed amount monthly through recurring deposits as well.
You can choose your returns, on an annual, monthly, or at-maturity options. This pay-out ensures you gain a periodic income and can reinvest or continue what you have. Banks also offer flexible deposit options that you can add to your initial investment.
Some banks offer term deposits for a minimum tenor as low as 30 days and deposit of AED 1000. In some cases, even no minimum balance is available. So, you can account for liquidity when you choose the term of your investments.
The fixed interest rate on a time deposit means that even if market interest rates are falling, fluctuating, your money will keep earning the interest agreed.
Based on the TD, a complimentary credit card and loans (up to the full value of your deposit), access to relationship manager, free life insurance, overdraft, free international ATM/debit card; personalized check book with checking facility and cash withdrawal. The facilities are available in AED and equivalent for major currencies such as USD, AUD or CAD. Best of current and savings account?
Investing your hard earned money in a TD is a good choice if you do not want to take risks. Now that you are aware of the benefits, take out some time to apply for a time deposit today. It will be time well spent.
You are now leaving the Citi UAE website and entering a third party site. All the information you provide will be subject to confidentiality and security terms of the applicable third party site. Citi UAE does not take responsibility for information you provide at such third party sites. Would you like to continue?