Advantages of Term Deposits If you need a smart way to save money, with better interest than a basic account but without the risk of traditional investing, consider term deposits. Commonly known as certificates of deposit (CDs), these short-term investments provide a guaranteed return in exchange for committing funds for extended periods. The length of time ranges from six months to five years, with the longer time periods offering higher rates. “The biggest benefits of term deposits are safety and convenience,” says Matt Farrow, a member of the Deposit Operations Team at Mountain America Credit Union. “Term deposits don’t require a large up-front investment—minimum deposits are typically $500 to $1,000,” Farrow adds. “They’re flexible in the rates and terms they offer, and the returns are predictable because the rates are fixed.” Term deposits are insured up to $250,000, making them as safe as a savings account but with a higher return. The only risk is early withdrawal, which will forfeit some of your earnings and will often cost additional fees. The U.S. Securities & Exchanges Commission does caution investors in CDs to read the fine print, especially where higher yields are promised. “Don’t be dazzled by high yields,” the SEC says on its website. “Before you purchase a CD, make sure you fully understand all of its terms—ask questions and check out the answers with an unbiased source.” Many investors overlook term deposits as they chase high-risk, high-reward investments. But the guaranteed nature of term deposits provides a great way to build savings and diversify your portfolio to protect against market swings. Finally, term deposits are a great tool to introduce young people to investing. Mountain America has youth term deposits that are available with a minimum deposit of just $25. You can teach your kids how to save and you can rest assure that their savings are safe with a term deposit. *Loans subject to credit approval. See current rates and terms. Membership required—based on eligibility. **There is a $15 upfront charge for the report, but it will be rebated if you finance a vehicle from Mountain America. Loan must close within 90 days of purchasing report. Rebated amount will be deposited into account used to purchase code. Loan does not have to be for the vehicle for which report was pulled.