Like any investment option, term deposits have both pros and cons. Their appeal is likely to vary between people depending on factors such as risk tolerance and the importance of accessibility. Term deposits are a part of many people’s long-term financial strategy and offer an easy, low-maintenance approach to savings while adding a layer of diversification to an investment portfolio
Whether you’re padding your retirement nest egg, saving up for a mortgage, or just building up your investments, here are some of the biggest advantages of investing in term deposits:
- They’re low risk.
A term deposit makes sure your money will earn interest at a fixed rate for a fixed term. There’s very little to no chance of losing your money, so it’s often a preferred option for cautious investors.
- They’re low maintenance.
Once you’ve put some money in a term deposit, you can just keep it in there until your term is up – no management required.
- There are no service or startup fees.
Plus, the best part is that as long as you don’t withdraw early (if you’ve invested in a non-redeemable term deposit), it’s completely fee-free – a good incentive for people who have impulse spending habits.
- You will be protected from market slowdowns.
The fixed interest rate on a term deposit means that even if market interest rates are falling, your savings will keep earning the same level of interest.
Types of Term Deposits at Interior Savings
Our term deposits offer choice and flexibility. Based on our current and future financial goals, you can choose to:
- Invest in the short, medium or long-term
- Select a cashable or non-cashable option
- Boost your potential for returns through laddering, Escalator Term Deposits, or Index-Linked Term Deposit options
- Hold investments inside your RRSP and/or Tax-Free Savings Account (TFSA)
Redeemable vs. Non-Redeemable Term Deposits
If accessibility to your funds is a top priority for you, redeemable deposits will likely be a preferred option since they are cashable at any time prior to maturity. On the other hand, although non-redeemable term deposits cannot be cashed in during their term, they will typically receive higher interest rates. At maturity, you will have the option to renew your term deposit or withdraw the funds.
You can use either product or both in combination to meet your individual investment needs. To see the current rates* for all our term deposits, click here.
*Note: Rates are subject to change.