A certificate of deposit (CD) or savings account which is held in a bank or depository institution for a preset period of time or for whenever a holder wishes to withdraw provided a prior notice is submitted to the bank. Such an investment vehicle pays higher interest rates than ordinary savings account or demand deposit but restricts the holder’s behavior or discretion with respect to the amount, frequency, and/ or period of withdrawals. Time deposits are particularly viable if an investor doesn’t need immediate access to his money and wants a predictable rate of return.

Time deposit is also known as a fixed deposit or a term deposit (in countries such as New Zealand, Australia, and Canada).