Do you keep promising yourself to save money but end up spending it on impulse buying and online shopping? Saving can be a challenge for some people and a breeze for others, and whether it comes naturally or by practice, it is important for financial security.Luckily, banks offer investment tools to help people save money and avoid impulse spending. In addition to savings accounts, customers can choose from certificates of deposits (CDs) and time deposits (TDs) when deciding on the best saving strategy. We’ll answer some of the questions you might encounter when choosing the right tool below:
What is a time deposit?
Simply put, a time deposit is an investment short- to medium-term tool designed by financial institutions to help you save money and accumulate interest. A time deposit is convenient if you want to make use of the extra cash on hand without getting yourself into deep water with more complex investment options. It’s similar to locking your money in a safe to avoid spending it for a specific period of time.
What is the difference between Certificates of Deposit and Time Deposit?
The duration of CDs ranges from three to five years, while TDs range from one week to two years. Additionally, CDs have a lock-up period of six months to one year, but TDs do not have one, which is ideal for customers looking for quick returns. If you’re wondering what a lock-up period even means, it’s the period during which you are not allowed to withdraw or redeem your money.
Are time deposits safe?
Absolutely! Time deposits are a safe, low risk investment tool. They ensure your money will earn interest at a fixed rate, for a fixed term.
Are TDs only available in local currency?
No, time deposits are offered in EGP, USD, GBP, and EUR with different interest payouts.
These financial terms sound complicated. Will I be able to make an informed decision when deciding on an investment tool?
Don’t let the technical terms scare you. CDs and TDs are simple to understand and are low maintenance. You don’t need to have financial knowledge to be able to save money with the bank.
If I want to upgrade my phone or car, which investment tool should I opt for?
Time deposits are perfect for short- and medium-term goals such as buying a phone, laptop, house, paying school fees, upgrading your car, or even going on a trip!
Why don’t I just keep my money at home?
Keeping cash in large amounts at home is not the safest option, and there will always be the temptation to spend it. Plus, when you stash it at home, you don’t earn any interest, so why not put your money to good use by investing it?
I’m completely new at this. Which saving tool should I start with?
There are many investment tools to choose from, but if this is your first time, time deposits are suitable to start with, thanks to their flexible and low-risk nature.If you’re looking to save up for a future goal or prevent yourself from squandering your money, it’s best to consider investing in a time deposit. Securing your financial future requires planning and prudence, and it’s always good to start early—your future self will thank you!
Learn more about CIB's Time Deposits