Terminology - Investment - Time Deposits
Time Deposits. Short-
or medium-term, interest-bearing, FDIC-insured debt instrument offered by banks
& savings & loans. The account holder has agreed to keep the money in
the account for a specified amount of time, anywhere from 3 months to 6 years.
Time Deposits offer
higher rates of return than most comparable investments, in exchange for tying
up invested money for the duration of the certificate's maturity. Money removed
before maturity is subject to a penalty.
Time Deposits are low
risk, low return investments, and are also known as "Certificate of
Deposit".
Many people invest in
a Time Deposits / Certificate of Deposit account since it bears low risk, but
they could get a better return on investment if they were to select a different
investment option.
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