Interest rate
The interest rate on a term deposit is usually higher than that of a regular savings account, but it may vary depending on the length of the term and the amount of money you deposit. It is important to always understand the interest rate associated with the term deposit to see if it viable with your current investment goal.
Term length
The length of a term deposit can range from a few months to several years. Choose a term length that meets your needs and goals. As stated previously, planning ahead of time with an investment is a very important consideration. Ensure that the term length is suitable for your financial goals and that having funds tied up over a long period of time will not leave you financially vulnerable.
Liquidity
Because you cannot access the funds in a term deposit without incurring a penalty, it is important to make sure you will not need to withdraw the money before the term ends.
Fees
Some term deposits may have fees associated with them, such as account maintenance fees or early withdrawal fees. Be sure to read the fine print and understand any fees that may apply.
Inflation
The value of money can decrease over time due to inflation. A term deposit may not offer a high enough interest rate to offset the impact of inflation on the purchasing power of your money. This is a very hard one to judge as inflation varies depending on the economic state of the country. However, it is still important to take this potential risk into consideration.