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time deposit

 
Dictionary: time deposit
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n.
A bank deposit that cannot be withdrawn before a date specified at the time of deposit.


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Investment Dictionary: Time Deposit
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A savings account or CD held for a fixed-term with the understanding that the depositor can only withdraw by giving written notice.

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The term generally is at least 30 days.

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Banking Dictionary: Time Deposit
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1. Deposit account paying interest for a fixed term, with the understanding that funds cannot be withdrawn before maturity without giving advance notice. A time deposit is also known as an investment account or time certificate of deposit. Time deposit accounts, evidenced by either a paper certificate or a statement mailed to the depositor when interest is paid, normally pay a fixed rate of interest, and have maturities of seven days to seven years or longer. The notification of withdrawal requirement ordinarily is waived for consumer deposits, though not for large dollar corporate time deposit accounts. Consumer withdrawals still are subject to an Early Withdrawal Penalty and partial loss of interest. Federal Reserve Regulation Q requires that account withdrawals within six days after being deposited be subject to a loss of six days' interest. Time deposit accounts owned by a corporation (Nonpersonal Time Deposits) are subject toReserve Requirements but at a lower rate than transaction accounts, such as checking accounts. See also Certificate of Deposit; Ninety-Day Savings Account; Passbook.

2. Time deposit open account, an interest bearing deposit account allowing multiple deposits, but limited right of withdrawal before maturity. For example, club accounts, such as Christmas Clubs and vacation clubs. The deposit is evidenced by a ledger entry on the books of the depositing financial institution.

Wikipedia: Time deposit
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For an article more specific to the United States, see Certificate of deposit.

A time deposit (also known as a term deposit, particularly in Canada, Australia and New Zealand; a bond in the United Kingdom; fixed deposit in India and in some other countries) is a money deposit at a banking institution that cannot be withdrawn for a certain "term" or period of time. When the term is over it can be withdrawn or it can be held for another term. Generally speaking, the longer the term the better the yield on the money. A certificate of deposit is a time-deposit product.

The opposite is a Demand deposit or a sight deposit which can be withdrawn at any time, without any notice or penalty; e.g. money deposited in a checking account or savings account in a bank.

A deposit of funds in a savings institution is made under an agreement stipulating that (a) the funds must be kept on deposit for a stated period of time, or (b) the institution may require a minimum period of notification before a withdrawal is made.

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US Time deposits regulations

Note that the M2 money supply includes funds that can be used directly in payment, such as money market mutual funds and money market deposit accounts (MMDAs). MMDAs are considered by the United States Federal Reserve (the Fed) to be savings accounts and are thus exempt from reserve requirements. These large transaction accounts not being included in the M1 money supply suggests that the Fed does not pay much attention to ordinary deposits, and in July 2000, it announced that it was no longer setting target ranges for growth rates of the money supply.

Small-denomination time deposit

"Small" time deposits in M2 (see money supply) are defined as those under $100,000.

Large-denomination time deposit

"Large" time deposits are currently defined as deposits larger than $100,000. The term "jumbo CD" is commonly used in the United States. Some banks, recognizing that customers do not want more in the bank than is covered by insurance, have lowered the "jumbo CD" minimum requirement to $95,000, so with compounded interest the total falls below the insurance limit.

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External links


This entry is from Wikipedia, the leading user-contributed encyclopedia. It may not have been reviewed by professional editors (see full disclaimer)

 
 

 

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Dictionary. The American Heritage® Dictionary of the English Language, Fourth Edition Copyright © 2007, 2000 by Houghton Mifflin Company. Updated in 2009. Published by Houghton Mifflin Company. All rights reserved.  Read more
Investment Dictionary. Copyright ©2000, Investopedia.com - Owned and Operated by Investopedia Inc. All rights reserved.  Read more
Banking Dictionary. Dictionary of Banking Terms. Copyright © 2006 by Barron's Educational Series, Inc. All rights reserved.  Read more
Wikipedia. This article is licensed under the Creative Commons Attribution/Share-Alike License. It uses material from the Wikipedia article "Time deposit".  Read more