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Simple English definitions for legal terms
time deposit
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A quick definition of time deposit:
A time deposit is when you give your money to a bank for a specific amount of time. You can't take the money out until the time is up or you give the bank notice. It's like giving your money to the bank to keep it safe and earn interest.
A more thorough explanation:
A time deposit is a type of bank deposit where the money is kept in the bank for a specific period of time or requires notice before withdrawal. This is different from a demand deposit, where the depositor can withdraw the money at any time without prior notice to the bank.
For example, if you put $1000 in a time deposit for 6 months, you cannot withdraw the money until the 6 months are up. If you need the money before then, you may have to pay a penalty or lose some of the interest earned.
Another example of a time deposit is a certificate of deposit (CD), which is a type of savings account that earns a higher interest rate than a regular savings account but requires the money to be kept in the account for a specific period of time.
Overall, time deposits are a way for banks to secure funds for a set period of time and offer higher interest rates to depositors in return.