savings account at a financial institution that earns interest but is not legally subject to withdrawal on demand or transfer by check. The depositor can withdraw only by giving notice. A Certificate of Deposit (CD) is a special type of time deposit. Should the CD depositor wish to withdraw funds prior to the date of maturity, the financial institution imposes a substantial penalty.
- deposit account paying interest for a fixed term, with the understanding that funds cannot be withdrawn before maturity without giving advance notice. A time deposit is also known as an investment account or time certificate of deposit early withdrawal penalty. Time deposit accounts, evidenced by either a paper certificate or a statement mailed to the depositor when interest is paid, normally pay a fixed rate of interest, and have maturities of seven days to seven years or longer. The notification of withdrawal requirement ordinarily is waived for consumer deposits, though not for large dollar corporate time deposit accounts. Consumer withdrawals still are subject to an , and partial loss of interest. Federal Reserve Regulation Q requires that account withdrawals within sixdays after being deposited be subject to a loss of six days' interest. Time deposit accounts owned by a corporation ( nonpersonal time deposit) are subject to reserve requirements, but at a lower rate than transaction accounts, such as checking accounts.
- time deposit open account, an interest bearing deposit account allowing multiple deposits, but limited right of withdrawal before maturity. For example, club accounts, such as Christmas Clubs and vacation clubs. The deposit is evidenced by a ledger entry on the books of the depositing financial institution.
savings account or Certificate of Deposit held in a financial institution for a fixed term or with the understanding that the depositor can withdraw only by giving notice. Certificates of deposit are issued for a specified term of 30 days or more and carry penalties for early withdrawal.
savings account or Certificate of Deposit held in a financial institution for a fixed term or with the understanding that the depositor can withdraw only by giving notice. While a bank is authorized to require 30 days' notice of withdrawal from savings accounts, passbook accounts are generally regarded as readily available funds. Certificates of deposit, on the other hand, are issued for a specified term of 30 days or more, and provide penalties for early withdrawal. Financial institutions are free to negotiate any maturity term a customer might desire on a time deposit or certificate, as long as the term is at least 30 days, and to pay interest rates as high or low as the market will bear.
