Term Deposit vs Fixed Deposit
Term deposits and fixed deposits refer to deposits that are held in a bank for a fixed period of time. The two terms are used interchangeably and refer to the same types of deposits such as savings accounts and certificates of deposit. However, the term ‘fixed deposit’ is more commonly used in Asian countries, where the term ‘term deposit’ is mostly used in western countries. Either way they both refer to the same types of deposits. The article explains each term individually and shows how they are similar to one another.
Term Deposit
Term deposits are deposits that are held by banks and financial institutions over a fixed period of time. Such deposits have maturities from around a month to a few years. When term deposits are made the funds that are deposited can only be withdrawn at the time the deposit matures or by giving a number of days of notice in advance (depending on the type of term deposit). Term deposits are considered to be quite safe and low risk and, therefore, are preferred by many risk averse investors. Since funds are tied up at the bank for a longer period of time, term deposits usually offer consumers a higher interest rate than demand deposits. Certificates of deposit are popular term deposits and offer higher interest rates than savings accounts since funds need to be held for a longer period of time and cannot be withdrawn until maturity.
Fixed Deposit
Fixed deposits are deposits that are made with a bank that must be held for a fixed period of time. Such deposits earn interest on the amount that is saved; however prevent the customer from withdrawing funds at any time. In the event that the customer needs to make a withdrawal before the maturity date, a penalty such as an additional fee will be imposed on the customer. Advantages of fixed deposits are that they usually pay a fixed rate of interest on the funds in the account, and the interest rate will not change with any interest fluctuations. However, in the event that the interest rate increases the customer will end up receiving the fixed interest rate provided with the fixed deposit and will then earn less than if they had invested elsewhere.
定期存款和定期存款有什么区别？
Term deposits and fixed deposits are quite similar to each other. The terms are generally used interchangeably as they both refer to deposits that are held in banks and financial institutions for a fixed period of time. Term/fixed deposits earn high interest rates and interest earned is fixed and will not fluctuate with federal interest rates. Furthermore, funds held in a term/fixed deposit cannot be withdrawn on demand and the customer must pay a penalty to withdraw funds which may be in the form of a fee, or interest will stop accumulating in the account from the time of the premature withdrawal. Term and fixed deposits are considered to be safe investments and are quite popular among risk averse individuals.
Summary:
Term Deposit vs Fixed Deposit
•定期存款和定期存款是指固定时间内在银行中持有的存款。
• The two terms are used interchangeably and refer to the same types of deposits such as savings accounts and certificates of deposit.
• Term/fixed deposits earn high interest rates and interest earned is fixed and will not fluctuate with federal interest rates.
• Funds held in a term/fixed deposit cannot be withdrawn on demand and the customer must pay a penalty to withdraw funds.
• Term and fixed deposits are considered to be safe investments and are quite popular among risk averse individuals.
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