What are Term Deposits?
Term Deposits are cash amounts you can invest with a bank with set rate of interest over a specified amount of time. The amount of interest you receive back on the deposit amount will increase with the size of the deposit. Term deposits are an excellent way of providing a savings history in order to enable future borrowing. This can work very well in conjunction with saving for a major purchase like a home. Depending on which bank or financial institution you have the term deposit with your money maybe government guaranteed. Term deposits are definitely one of the safest and most conservative ways to invest money in a facility for a fixed return.
Why use Term Deposits?
Term deposits allow you to account for your financial future and benefit from interest on your money at the same time. This form of investment will give you an exact return on your money to further reinvest back into term deposits or while waiting for your term deposit to pay the interest you can observe other investment options. Term deposits are very sort after by banks in particular as this is a potential revenue stream for them when they lend this money out as loans. As a result there can be some negotiation on the interest rate to increase your percentage return.