Fixed Term

DEFINITION of 'Fixed Term'

Describes an investment vehicle, usually some kind of debt instrument, that has a fixed time period of investment. With a fixed-term investment, the investor parts with his or her money for a specified period of time and is repaid his or her principal investment only at the end of the investment period.

BREAKING DOWN 'Fixed Term'

A common example of a fixed-term investment is a term deposit, in which the investor deposits his or her funds with a financial institution for a specified period of time and cannot withdraw the funds until the end of the time period, or at least not without facing an early withdrawal penalty. This is the opposite of a demand deposit, in which the investor is free to withdraw his or her funds at any time. As a price for the convenience of withdrawal at any time, demand deposits generally pay lower interest rates than term deposits.

RELATED TERMS
  1. Early Withdrawal

    The removal of funds from a fixed-term investment before the ...
  2. Deposit Broker

    An individual or firm that facilitates the placement of investors' ...
  3. Time Deposit

    A savings account or certificate of deposit (CD) held for a fixed-term, ...
  4. Term Deposit

    A deposit held at a financial institution that has a fixed term, ...
  5. Maturity

    The period of time for which a financial instrument remains outstanding. ...
  6. Call Deposit Account

    A bank account for investment funds that offers the advantages ...
Related Articles
  1. ETFs & Mutual Funds

    Debt Mutual Funds Vs. Fixed Deposits

    Learn about the advantages and disadvantages of debt-oriented mutual funds and fixed deposit accounts, including how each investment generates income.
  2. Personal Finance

    Explaining Term Deposits

    A term deposit (more often called a certificate of deposit or CD) is a deposit account that is made for a specific period of time.
  3. Personal Finance

    Where To Put Your Cash: Call Deposit Vs Time Deposit Accounts

    Time deposit accounts and call deposit accounts allow customers to earn higher interest in exchange for less access to their cash.
  4. Investing

    How Time Deposits Work

    A time deposit is an interest-bearing bank deposit that has a specific maturity date.
  5. Personal Finance

    What is a Demand Deposit?

    A demand deposit is any type of account where the money in the account may be withdrawn at any time without prior notice to the financial institution.
  6. Retirement

    Evaluate the Performance of Your Investments

    Congratulations, you’re halfway done! Now that you know what you have along with some idea of how to accomplish your goals, it’s time to go over your portfolio to see whether it fits ...
  7. Personal Finance

    Money Market Accounts vs. Savings Accounts

    An interest-bearing account that pays a higher interest rate than a savings account and gives the account holder limited check-writing ability.
  8. Retirement

    Consolidating Your Retirement Money – Evaluate Performance

    Now that you know where you're going, it's time to see how well what you have matches your investment profile and objective(s).
  9. Retirement

    Why Cash is King When Markets are Volatile

    After the past several years, you might be addicted to equity. But when markets turn volatile, cash is the best option. Here's why.
  10. Retirement

    Should You Tap Into Savings To Pay Off Debt?

    People who cash out retirement accounts to pay off debt are kneecapping their savings efforts.
RELATED FAQS
  1. What is the difference between a demand deposit and a term deposit?

    Understand the meaning of demand deposits and term deposits, and learn about the major differences between these two types ... Read Answer >>
  2. For what types of accounts are demand deposits available?

    Learn about the different types of accounts designated as demand deposit accounts, such as savings accounts and money market ... Read Answer >>
  3. Are certificates of deposits different from money market demand deposits?

    What are the differences? ... Read Answer >>
  4. What are the Federal Reserve's guidelines on demand deposit accounts?

    Read about some of the Federal Reserve's requirements and guidelines regarding the treatment, safeguarding and processing ... Read Answer >>
  5. How do you withdraw money from your 401(k)?

    Deciding to take a withdraw from your 401k is not a decision that should be made lightly. However, for those who needs funds, ... Read Answer >>
  6. What is the safest investment?

    Learn about some of the safest investment types. Find out which investment categories offer the best protection on your principal ... Read Answer >>
Hot Definitions
  1. AAA

    The highest possible rating assigned to the bonds of an issuer by credit rating agencies. An issuer that is rated AAA has ...
  2. GBP

    The abbreviation for the British pound sterling, the official currency of the United Kingdom, the British Overseas Territories ...
  3. Diversification

    A risk management technique that mixes a wide variety of investments within a portfolio. The rationale behind this technique ...
  4. European Union - EU

    A group of European countries that participates in the world economy as one economic unit and operates under one official ...
  5. Sell-Off

    The rapid selling of securities, such as stocks, bonds and commodities. The increase in supply leads to a decline in the ...
  6. Brazil, Russia, India And China - BRIC

    An acronym for the economies of Brazil, Russia, India and China combined. It has been speculated that by 2050 these four ...
Trading Center