Time Deposit

A popular time deposit is a CD account. Time deposits are deposits with a time component, i.e. the deposit must be untouched for a fixed time period in exchange for the interest. Because you’re agreeing to "no touching" with time deposits, they come with higher interest rates than more liquid deposits, like checking and savings accounts. The longer the term, the higher the interest rate will be.

If you touch your deposit and withdraw early, you’ll have to pay a pretty penalty fee to get it out. Also, like regular ol' bank accounts, time deposits are typically FDIC (Federal Deposit Insurance Corporation)-insured, in the U.S. at least...up to $250k per investment. For credit unions, CDs are NCUA (National Credit Union Administration)-insured.

Time deposits are great for people looking for a safe place to park their cash, with better returns than a bank account. Of course, that comes at the loss of potentially higher returns made elsewhere, like on the stock market. Time’s a-ticking, so you'd better decide what to do with that cash.