Parameters Of Term Deposit Comparison
Term deposits are the special accounts in which the money is kept for a specified period of time for an assured periodic return
. For a financial planner, these are the avenues of zero risk investments of funds. Since the risk is zero, these are generally considered to be non-growth oriented investment avenues for parking. The different banking and financial institutes have different rates to offer for the term deposits and therefore, the term deposit comparison shall be done before deciding on a single provider.The main factors, on which the term deposit comparison of interest rates depends, are the following:
1.The amount of money to be invested: You shall commit only that much of sum to the term deposit which you are not likely to use any time in future. Some of the schemes do not allow you to withdraw the funds before the maturity period. There might be different rates for different sums to be invested even if the same maturity period is there.
2.The length of time for which you need to invest: Generally, the more is the time period for which you need these term deposits, the more will be the interest rate since the banks or the FIs would like you to keep invested for a long time period.
3.How the interest payments are being paid out: The interest rates are also dependent on how you want to receive the payments for these. If you need these at the end of the maturity period, these can come at a higher interest rate than the ones which are required periodically.
4.The policies of the banks: If the banks require the money to be invested for some long term, then it can set attractive interest rates for the term deposits. It can also mean that some of the population groups are targeted more than the others. Generally, the aged or the elder citizens are offered a higher interest rate than the younger ones. The bank of Cyprus term deposit rates could be placed a little higher than the other bigger ones since the former might be requiring the funds to fuel its growth strategy.
For term deposit comparison, there is a need to make a comparison of a number of variables across different entities. Besides these factors, you would also be interested in knowing the reputation of the bank or the FI. Some of the banks which are offering higher interest rates might not be having very strong financials.
You can seek the expert advice from some good financial advisor on this matter. You can make use of the different types of online calculators which can aid you in making the calculations and making comparisons. Or, alternatively, there are many online sites which can present the comparisons of the rates, the deposit amounts and the maturity periods. These can be of good help to make inter-institutional comparisons on the term deposit rates.
These deposits in the bank of Cyprus term deposit plans or those of other entities could also be made in the foreign currencies, whose interest can be converted into the native currency at the time of maturity.
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