Fixed deposit là gì

James Chen, CMT is an expert trader, investment adviser, và global market strategist. He has authored books on technical analysis and foreign exchange trading published by John Wiley & Sons & served as a guest expert on CNBC, BloombergTV, Forbes, và Reuters among other financial media." data-inline-tooltip="true">James Chen




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What Is a Term Deposit?

A term deposit is a fixed-term investment that includes the deposit of money into an tài khoản at a financial institution. Term deposit investments usually carry short-term maturities ranging from one month khổng lồ a few years & will have varying levels of required minimum deposits.

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The investor must understand when buying a term deposit that they can withdraw their funds only after the term ends. In some cases, the tài khoản holder may allow the investor early termination—or withdrawal—if they give several days notification. Also, there will be a penalty assessed for early termination.

A term deposit is a type of deposit tài khoản held at a financial institution where money is locked up for some phối period of time.Term deposits are usually short-term deposits with maturities ranging from one month to lớn a few years.Typically, term deposits offer higher interest rates than traditional liquid savings accounts, whereby customers can withdraw their money at any time.

Term Deposit Explained

When an tài khoản holder deposits funds at a bank, the ngân hàng can use that money lớn lend lớn other consumers or businesses. In return for the right to use these funds for lending, they will pay the depositor compensation in the size of interest on the tài khoản balance. With most deposit accounts of this nature, the owner may withdraw their money at any time. This makes it difficult for the bank to know ahead of time how much they may lend at any given time.

To overcome this problem, banks offer term deposit accounts. A customer will deposit or invest in one of these accounts, agreeing not lớn withdraw their funds for a fixed period in return for a higher rate of interest paid on the account.

The interest earned on a term deposit tài khoản is slightly higher than that paid on standard savings or interest-bearing checking accounts. The increased rate is because access to the money is limited for the timeframe of the term deposit.

Term deposits are an extremely safe investment and are therefore very appealing lớn conservative, low-risk investors. The financial instruments are sold by banks, thrift institutions, andcredit unions. Term deposits sold by banks are insured by the Federal Deposit Insurance Corporation (FDIC). The National Credit Union Administration (NCUA) provides coverage for those sold by credit unions.

How a bank Uses a Term Deposit

If a customer places money in a term deposit, the ngân hàng can invest the money in other financial products that pay a higher rate of return (RoR) than what the bank is paying the customer for the use of their funds. The bank can also lend the money out lớn its other clients, thereby receiving a higher interest rate from the borrowers as compared khổng lồ what the bank is paying in interest for the term deposit.

For example, a lender may offer a 2% rate for term deposits with a two-year maturity. The funds deposited are then structured as loans to borrowers who are charged 7% in interest on those notes. This difference in rates means that the ngân hàng makes a net 5% return. The spread between the rate the ngân hàng pays its customers for deposits & the rate it charges its borrowers is called net interest margin. Net interest margin is a profitability metric for banks.

Banks are businesses, as such, they want lớn pay the lowest rate possible for term deposits and charge a much higher rate to lớn borrowers for loans. This practice increases their margins or profitability. However, there is a balance the bank needs to lớn maintain. If it pays too little interest, it won't attract new investors into the term deposit accounts. Also, if they charge too high of a rate on loans, it won't attract new borrowers.

Term Deposits và Interest Rates

In periods of rising interest rates, consumers are more likely to lớn purchase term deposits since the increased cost of borrowing makes savings more attractive. Also, with higher market interest rates, the financial institution will need lớn offer the investor a higher rate of interest, so the investor also earns more.

When interest rates decrease, consumers are encouraged khổng lồ borrow and spend more, thereby stimulating the economy. In a low interest rate environment, demand for term deposits can decrease since investors can typically find alternative investment vehicles that pay a higher rate.

Typically, interest rates should be proportional to the time until maturity, và the minimum amount of principal lent to the credit union or bank. In other words, a six-month term deposit will likely pay a lower interest rate than a two-year term deposit. Investors not only receive a higher rate for locking up their money with the ngân hàng for extended periods, but also should earn a higher rate for large deposits. For example, a jumbo CD, which is a term deposit above $100,000, will receive a higher interest rate than a $1,000 CD.

Opening or Closing a Term Deposit

Term deposits are also called certificates of deposits. Customers can view the conditions of the term deposit via a paper statement. This statement includes the required minimum principal amount, the interest rate paid, & the duration (or time khổng lồ maturity), as agreed by the bank and the depositor. 

If a customer wants to close a term deposit before the end of the term, or maturity, the customer will be subject to a penalty. This penalty may include the loss of any interest paid on the deposit tài khoản until that point. Closing the CD before the term ends lets the customer take back the principal amount invested but with the forfeiture of the earned interest.

The penalty for withdrawing prematurely or against the agreement is stated at the time of opening a term deposit, as required by the Truth in Savings Act.

Sometimes, if interest rates have risen considerably, it might be worth it for a customer khổng lồ close the term deposit early, take the penalty for the early withdrawal, và reinvest the funds elsewhere at a higher rate. It's important lớn be sure that the alternative rate is high enough to lớn more than compensate for the original rate on the term deposit plus the cost of the penalty.

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Investors holding retirement CDs should speak to a financial planner or tax advisor who can explain the different regulations involved in early withdrawal from these investments.

Inflation and Term Deposits

Unfortunately, term deposits vị not keep up with inflation. The inflation rate is a measure of how much prices rise in a given year. If the rate on a term deposit is 2% và the inflation rate in the U.S. Is 2.5%, theoretically, the customer is not earning enough khổng lồ compensate for price increases in the economy.

Laddering Strategy

Rather than investing a large lump sum into one term deposit, an investor may use a strategy that spreads out the funds between several CDs. This strategy for investing using term depositsis to distribute an investment evenly over a mix number of years with maturities coming at regular intervals. This laddering investment strategy locks in the interest rates with the CDs at longer terms having higher rates than those with shorter terms. As the CDs mature, the customer can choose to use the money for income by withdrawing the funds or roll those funds into another CD lớn continue the ladder. The method allows the investor lớn have access to funds as they mature.

For example, an investor can deposit $3,000 each into a five, four, three, two, and one-year term deposit. One of the CDs matures each year, which allows the customer lớn either withdraw the money for expenses or roll the funds into a new account. The new term deposit will have a rate based on the current market rate. This method is popular for retirees who need to lớn withdraw a mix amount of income each year from their savings khổng lồ pay for living expenses.

The strategy can be used while investing with the same credit union or bank, or across several different institutions. The investor can either withdraw the principal và interest upon maturity or reinvest the funds if they are not needed.


Term deposits offer a fixed rate of interest over the life of the investment.

Term deposits are risk-free, safe investments since they're either backed by the FDIC or the NCUA.

Various maturities allow investors khổng lồ stagger end-dates to create an investment ladder.

Term deposits have a low minimum deposit amount.

Term deposits pay higher rates for larger initial deposit amounts.


Interest rates paid on term deposits are typically lower or less attractive than most fixed-rate investments.

Term deposits can't be withdrawn early without penalty or losing all of the interest earned.

Interest rates don't keep up with rising inflation.

Interest rate risk exists if investors are locked in a low-rate term deposit while overall interest rates are rising.

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Example of Term Deposits

Wells Fargo bank (WFC) is one of the largest consumer banks in the U.S. & offers several types of term deposits. Below are a few of the bank"s CDs along with the interest rates paid lớn depositors as of Mar. 19, 2022:

A six-month CD with a minimum $2,500 deposit pays 0.01%.A one-year CD with a minimum $2,500 deposit pays requires writers to use primary sources to support their work. These include trắng papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased nội dung in oureditorial policy.