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.


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.

  1. Maturity

    The period of time for which a financial instrument remains outstanding. ...
  2. Term Deposit

    A deposit held at a financial institution that has a fixed term, ...
  3. Term To Maturity

    The remaining life of a financial instrument. In bonds, it is ...
  4. Redemption

    The return of an investor's principal in a fixed income security, ...
  5. Time Deposit

    A savings account or certificate of deposit (CD) held for a fixed-term, ...
  6. Maturity Date

    The date on which the principal amount of a note, draft, acceptance ...
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