A Personal Term Deposit is an investment product that locks away your savings for a certain period of time.

It’s a low risk way to build up your emergency fund, short-term savings or save for longer-term goals like a down payment on a house or vacation. You can find a variety of fixed terms from two months to five years and only need to save up to between $1,000- $5,000 to get started.

What You Want Your Money For

Before you decide if a personal term deposit is right for you, it’s important to understand how much you want to invest and what you are saving for. Do you need the money as an emergency fund or a short-term investment? Or do you need the money to be used for a specific purpose such as buying a house or paying for your kids’ education?

What Are the Advantages and Disadvantages of Term Deposits?

Term deposits offer a guaranteed rate of interest for a set period of time, which is a great way to protect your principal investment amount. They are also often a low-risk way to invest as they are not subject to the ups and downs of the market like stocks and other investments.

However, because they are fixed-rate investments, the amount of interest that you earn may not keep up with inflation or tax, which can reduce your total return. If you want to be sure your money will still make money over the long term, you might consider looking at alternative investments such as high-yield savings accounts or stocks.