Term Deposit refers to a deposit kept with a bank for a fixed term. The maturities for term deposit range from between a month to a few years. Once a customer buys a term deposit, he can withdraw the money only after the predetermined term has ended or by giving a few days notice to the bank.
Term deposits are considered one of the safest investments. As a result, risk-averse investors find them very attractive. Term deposits generally pay a higher rate compared to demand deposits.