Time deposit
BankingDefinition
A deposit that requires the depositor to leave the funds for a fixed term in exchange for a higher interest rate. CDs are the most common form. Early withdrawal triggers a penalty.
Differs from a savings account (no fixed term) and a money market account (variable rate). Time deposits help banks predict their liquidity profile and lock in funding for the term.
Differs from a savings account (no fixed term) and a money market account (variable rate). Time deposits help banks predict their liquidity profile and lock in funding for the term.