Can anyone help me what is time deposit?

i don't understand how the interest work.





let's say you put a $1000 on a 12 month time deposit and 3% interest. do you get 3% interest every month? or just 3% for the whole year which is $30?|||It depends on when the interest is compounded. That's why there's an interest rate and an annual percentage yield (APY). Most CDs (certificate of deposit) have a semi-annual yield, which means it's paid every six months. Savings accounts generally have a quarterly yield, which is paid at the end of each calendar quarter, or every three months.





So if you put $1000 into a CD at a 3% interest rate, you'd earn 3% for the first six months, which would be $15, and that would be added to the balance, so for the next six months you'd earn 3% on $1015, which would be $15.23, so the total interest earned for the 12 months would be $30.23, or an APY of 3.02%.





Hope this helps!|||You get only $30 for the whole year. You might not even get the monthly interest in some banks. This is why shrewd businessmen prefer to invest their money elsewhere than make a time deposit which often works only for huge accounts.|||You get 3% for the year. Interest rates are almost always quoted on an annualized basis no matter what the length of time the money is on deposit. Since interest is usually credited to your account quarterly there is a slight amount of compounding that occurs and you actually wind up with a bit more than $30 at the end of one year.|||You only get it for the whole year. If you invest for 6 months, you often get the interest at the end of that period, which would be $15.





Cash term deposits are a great way to tie up money you've saved if it has a tendency to slip through your fingers. However, if you're after a better return and ongoing interest (which, considering you might invest $1000 and get a twelfth of your 3% each month, which would result in a higher overall gain at the end of the year) you might be better with a good cash management account, or even a managed or mutual fund based on something nice and stable, like the cash market, or mortgages.





Go to morningstar.com (add your country's prefix, ie .au) and have a look at their 'quick rank' feature. It's a good way to find an investment product that suits your criteria. Then you can contact the institution offering the product and get more information.





Best wishes|||A term deposit for a 12 month period will normally be simple, non-compounding interest for the year if the term is one year. That simple non-compounding assumption pays you $30 for the year.





This is the least it could be, we expect this is what it will be.