2007-03-02 01:15:35 · 2 answers · asked by Maddy 1 in Business & Finance ➔ Investing
Like a CD. You agree to put a certain amount of money on deposit for a contractually agreed upon term (like a one year or five yeard CD) at the end of that term the bank will give you a specified amount of interest. If you withdraw your money before the end of the term, you will pay a penalty.
2007-03-02 01:20:51 · answer #1 · answered by BosCFA 5 · 0⤊ 0⤋
A time or term deposit means you place a fixed sum of money into a deposit with a bank or a finance company. Usually interests for such deposits are slightly higher versus a regular savings account. However, should you decide to close the account or withdraw the money before the term is due, there will be penalty. Penalty ranges from 1.5 to 5% of the amount deposit which the bank or finance company will deduct before paying you the balance amount. For example: you place US$500 in a 3 month deposit. In month 2 you decide to close the account. Let's say the penalty is 2% of US$500 deposited which works out to US$10. So what you're get back is US$490.
2007-03-02 09:24:59 · answer #2 · answered by SGElite 7 · 0⤊ 0⤋