Time Deposit Law and Legal Definition

A time deposit is a money deposit that cannot be withdrawn for a specific period pf time. A time deposit is also known as a term deposit, bond deposit, and fixed deposit. When the term for which the amount is deposited passes, the amount can be withdrawn or can be held for other purposes. A bank can ask for a penalty in the case of an early withdrawal. The longer the tern the better the yield. Usually a term deposit is withdrawn after giving advance notice. The minimum term for a time deposit is thirty days. A certificate of deposit is a product of a time deposit. Certificates of deposit are insured and risk-free. However, in a demand deposit, money can be withdrawn at any time. In a demand deposit, there is no need for notice.