Term Deposit

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Definition of 'Term Deposit'

A term deposit is a type of deposit account offered by banks and other financial institutions. It is a safe investment that provides a guaranteed return on your money.

The term of a term deposit can range from one month to five years, and the interest rate is usually higher than the rate offered on a savings account. However, you will not be able to access your money until the term deposit matures.

There are two main types of term deposits:

* **Fixed-rate term deposits** offer a fixed interest rate for the entire term of the deposit.
* **Variable-rate term deposits** offer an interest rate that can change during the term of the deposit.

When choosing a term deposit, you should consider the following factors:

* The length of the term
* The interest rate
* The flexibility of the deposit
* Your risk tolerance

If you are looking for a safe investment with a guaranteed return, a term deposit may be a good option for you. However, if you need access to your money in the short term, a term deposit may not be the best choice.

Here are some additional details about term deposits:

* You can usually open a term deposit with as little as $100.
* Term deposits are insured by the Australian Government up to a maximum of $250,000.
* You can make additional deposits to your term deposit during the term, but you will not earn interest on these deposits.
* You can withdraw your money from a term deposit before it matures, but you will usually have to pay a penalty.

Term deposits are a popular investment option for people who are looking for a safe place to store their money. They offer a guaranteed return on your investment, and they are insured by the government. However, you should be aware that you will not be able to access your money until the term deposit matures.

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