TIME DEPOSIT Meaning and
Definition
-
A time deposit, also known as a term deposit or a certificate of deposit (CD), is a type of financial product offered by banks and financial institutions to individuals and businesses. It is a fixed-term investment that allows customers to deposit a specific amount of money for a predetermined period, during which the money cannot be withdrawn without incurring penalties.
Time deposits are typically offered with higher interest rates compared to regular savings accounts as an incentive for customers to keep their funds locked away for an agreed-upon term, which can typically range from a few months to several years. This interest rate is usually fixed for the entire duration of the deposit, ensuring a stable return on the investment.
Unlike traditional savings accounts, time deposits have limited liquidity. Withdrawals made before the agreed-upon term result in penalties or reduced interest earnings. This characteristic makes time deposits more suitable for individuals or businesses looking to save money over a predetermined period without the need for immediate access to the funds.
Time deposits provide a secure and low-risk method of growing capital by earning interest. They are insured by the government up to a certain amount, which varies by jurisdiction. Their fixed terms also provide individuals and businesses with an opportunity to plan and budget effectively for future expenses or financial goals.
Common Misspellings for TIME DEPOSIT
- rime deposit
- fime deposit
- gime deposit
- yime deposit
- 6ime deposit
- 5ime deposit
- tume deposit
- tjme deposit
- tkme deposit
- tome deposit
- t9me deposit
- t8me deposit
- tine deposit
- tike deposit
- tije deposit
- timw deposit
- tims deposit
- timd deposit
- timr deposit
Etymology of TIME DEPOSIT
The word "time deposit" combines two distinct words to form its meaning.
The term "time" is derived from the Old English word "tīma", which means "period", "season", or "hour". It has its roots in Proto-Germanic and is related to the Old Norse "tími" and the Old High German "zīmi". Over time, the word "time" came to be associated with the measurement of seconds, minutes, hours, days, and years.
The word "deposit" originated from the Latin word "deponere", which means "to put down" or "to lay aside". It consists of the prefix "de-" meaning "down" and "ponere" meaning "to put". The word "deposit" eventually came to refer to the act of placing or storing something valuable for safekeeping or future use.
Infographic
Add the infographic to your website:
