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Term Deposits: An Owner’s Manual

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They go by many names: term deposits, CDs, time deposits and fixed deposits. No matter what you call them, they can sometimes be the forgotten investment. While many people prefer the prestige of the stock market or the simplicity of an interest-bearing savings account, a term deposit is a great balance between the two.

When you’re looking for ways to put your money to work for you, a term deposit can be a great alternative.

What is a term deposit?
In exchange for a higher interest rate, term deposits require you to commit to keeping your money invested for a certain amount of time. You can choose a term from as little as six months to as long as five years. Interest rates typically increase with longer terms while penalties are assessed if you access your money before the term expires.

What are the rates?
The interest rate is the rate at which you’ll earn interest for the life of the certificate, this rate will differ from institution to institution. You’ll also probably see an APY rate. This means annual percentage yield and is usually higher than the interest rate because it takes into consideration the effects of compound interest—which includes the principal amount plus any interest gained in previous periods.

Is short- or long-term better?
To answer this question, you must think about two things: when you’ll need access to the money and if you think interest rates will go up or down. If you’re saving for a vacation, make sure the term you choose coordinates with the deadlines of your trip. If you’re saving for college tuition and your child is small, choose a longer term to get a higher return. As far as interest rates rising or falling, do some research or speak with a financial advisor to estimate any trends.

Why term deposits?

  • In addition to getting a better return than a typical saving account, term deposits are great for conservative investors. These certificates are FDIC-insured up to $250,000 which means you assume less risk than with bonds, stocks or other unpredictable investments.

  • There’s a wide selection of term deposits available. Choose from different maturity dates from thousands of different financial institutions. You’ll certainly find one that meets your needs.

  • Count on the return. Since you lock in your interest rate at the beginning of the term, you will know exactly what you’ll come away with at the end.


Boost your savings and prepare for your financial future by securing a term deposit from Mountain America Credit Union. We have certificates with maturity dates from six months to five years. And don’t miss our new option—Term Deposit Plus. Now you can make additional deposits during the term of your certificate to boost the value. Open your account online or in-person at one of our convenient branches.

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