Term Deposit
Term Deposit Facility
If you roll over your maturing Term Deposit into a new Term Deposit with us, you can earn an additional 0.10% bonus interest on top of our standard Term Deposit rates for the new term. 0% The amount of your deposit and interest that is sacrificed to fees.
Term deposits facilitate the implementation of monetary policy by providing an additional tool by which the Federal Reserve can manage the aggregate quantity of reserve balances held by depository institutions. Funds placed in term deposits are removed from the reserve accounts of participating institutions for the life of the term deposit and thereby drain reserve balances from the banking system. Reserve Banks offer term deposits through the Term Deposit Facility (TDF), and all institutions that are eligible to receive earnings on their balances at Reserve Banks may participate in the term deposit program. In the Policy Normalization Principles and Plans adopted by the Federal Open Market Committee (FOMC) on September 17, 2014, the FOMC indicated that during the process of monetary policy normalization, the Federal Reserve intends to use other supplementary tools, such as the TDF, as needed to help control the federal funds rate and move it into the target range set by the FOMC.
- Term deposit is often used when the deposit is extended for a certain term say 3 months, 6 months etc. While fixed deposit or FD is used when the deposit is for a period of six months or more.
- Term Deposits allow you to plan for your future and invest with confidence, knowing that you will receive a higher rate of return than many savings accounts over a fixed term. Take advantage of our competitive interest rates, no monthly account or service fees, and seamless interest payments directly into your Everyday Account.
- You can open a Term Deposit online under a personal, joint, or Self Managed Super Fund (SMSF) name. To do so, you need to be 18 years or over and have: A minimum deposit of $5,000 (call or visit your nearest branch for investments $2,000,000 and over).
| Current Operations | ||
|---|---|---|
| May 30 | Announcement | Result |
| August 22 | Announcement | Result |
Related Press Releases
- Federal Reserve announces TDF test operation (February 12, 2016)
- Federal Reserve announces TDF test operation (November 19, 2015)
- Federal Reserve announces plans to continue periodic testing of its Term Deposit Facility operations in August (August 3, 2015)
- Federal Reserve announces plans for periodic testing of its Term Deposit Facility (May 14, 2015)
- Federal Reserve announces series of expanded TDF test operations with early withdrawal feature (February 2, 2015)
- Federal Reserve announces series of expanded TDF test operations with early withdrawal feature (September 4, 2014)
- Federal Reserve announces series of expanded TDF test operations (May 9, 2014)
- Federal Reserve plans to conduct a series of seven-day term deposit operations in March under the Term Deposit Facility (TDF) (February 21, 2014)
- Federal Reserve announces small-value fixed-rate term deposit operations (April 26, 2013)
- Federal Reserve Board approves amendments to Regulation D authorizing Reserve Banks to offer term deposits (April 30, 2010)
- Board authorizes ongoing small-value offerings of term deposits under the Term Deposit Facility (September 8, 2010)
- Federal Reserve announces schedule for small-value auctions of term deposits through the Term Deposit Facility (May 28, 2010)
- Board authorizes small-value offerings of term deposits under the Term Deposit Facility (May 10, 2010)
A time deposit or term deposit (in the United States also known as a certificate of deposit) is a deposit in a financial institution with a specific maturity date or a period to maturity, commonly referred to as its “term”. Time deposits differ from at call deposits, such as savings or checking accounts, which can be withdrawn at any time, without any notice or penalty. Deposits that require notice of withdrawal to be given are effectively time deposits, though they do not have a fixed maturity date.
Unlike a certificate of deposit and bonds, a time deposit is generally not negotiable; it is not transferable by the depositor, so that depositors need to deal with the financial institution when they need to prematurely cash out of the deposit.
Time deposits enable the bank to invest the funds in higher-earning financial products. In some countries, including the United States, time deposits are not subject to the banks’ reserve requirements, on the basis that the funds cannot be withdrawn at short notice. In some countries, time deposits are guaranteed by the government or protected by deposit insurance.
Interest[edit]
Time deposits normally earn interest, which is normally fixed for the duration of the term and payable upon maturity, though some may be paid periodically during the term, especially with longer-term deposits. Generally, the longer the term and the larger the deposit amount the higher the interest rate that will be offered.[1]
The interest paid on a time deposit tends to be higher than on an at-call savings account, but tends to be lower than that of riskier products such as stocks or bonds. Some banks offer market-linked time deposit accounts which offer potentially higher returns while guaranteeing principal.
At maturity[edit]
At maturity, the principal can be either paid back to the depositor (usually by a deposit into a bank account designated by the depositor) or rolled over for another term. Interest may be paid into the same account as the principal or to another bank account or rolled over with the principal to the next term.
The money deposited normally can be withdrawn before maturity, but a significant penalty will normally be payable.
See also[edit]
Term Deposit Rates
References[edit]
Term Deposit Interest Rates
- ^'Time Deposit'. Investopedia. 2003-11-24. Retrieved 2016-11-01.