How Term Deposits Can Work For You

A secure savings and investment option to help you achieve your goals

Short-term or long, redeemable or non-redeemable, registered or non-registered, guaranteed interest rate or market-based – term deposits come in many forms, with many options. There are key considerations to help you reach your savings goals by identifying a term deposit that works best for you.

In essence, a term deposit is exactly what it says it is – an investment of funds deposited into an account at a financial institution with a specific period. The term length (or time period) that the investment is to be held by the institution is stipulated up front with an investment rate of interest.

Similar in nature to Guaranteed Investment Certificates (GICs), term deposit investments typically offer a range of short maturity periods – from months to a few years, and others in between. Each specific term deposit offer will state a rate of return and a minimum amount required, both of which can vary depending on what is on offer at the time of your investment.

A safe investment option

While term deposits are not considered the most exciting investment option available, what they do offer is a safe and solid solution for your money, depending on your needs and goals. Term deposit investments are especially useful if you have specific term goals and concerns about your money during times of economic uncertainty and market volatility. Their resilience and conservative nature is a boon in such cases.

Here are a few features that set term deposits apart from other investments.

Guaranteed growth at maturity: Upon a term deposit’s due date, you get back the principal as well as a predictable rate of return as stated up front.

Low investment threshold: Term deposits can be purchased for as little as a few hundred dollars, with some as low as $100, making them a great tool for getting into investing.

No or low fees: Term deposits are very simple, typically offered without extra fees.

Flexible interest: With some term deposits you can compound your interest for higher growth, or receive regular interest payments monthly or annually. If you’re retired, this can be a particularly helpful boost to the investment income generated from your RRIF holdings.

Cashable options: If you need funds before maturity, cashable term deposits allow you easy access to your money, avoiding the risk of selling other investments at the wrong time. Cashable term deposits can also be a good choice for your emergency fund or other short-term money goals. But do consider that cashable term deposits normally pay a lower rate of interest than a locked-in term deposit. An advisor or BlueShore associate can help you determine the right strategy for you and your money .

For your consideration: market-linked term deposits

Looking for stability and growth potential? A market-linked term deposit might be a wise option. For these types of investment deposits, the rate of return is linked to the performance of a basket of named equities or stocks† and can offer higher growth potential than traditional fixed rate term deposits (depending on the performance of the market and the investment). Your principal deposit is guaranteed just as traditional term deposits are, but any earnings at the end of the term is determined by market performance.

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Redeeming your money

Each term deposit is invested under a set term – the length of time you commit to leaving your money invested . In general, non-redeemable term deposits are locked-in for the period and cannot be redeemed before the due date stipulated when you first deposit your money. Redeemable term deposits, however, can be cashed out before term, but doing so will impact the interest rate earned. Also note that, depending on the terms and conditions of the deposit, interest may not be paid if the deposit is cashed out prior to the end of the lock-in period. Be sure to anticipate your needs and understand the legal conditions of any investment.

When your term deposit is getting close to its maturity date, you will be contacted to review your options. This could include reinvesting or rolling over into a new term deposit of the same type and duration or depositing it into your account.

Depending on your objectives and your immediate needs for the funds, you may want to consider holding or reinvesting the money including your interest gains. An advisor or BlueShore associate can help you make the right call.

All deposits are 100% guaranteed^†

One interesting fact about a term deposit with a credit union like BlueShore Financial is that there is absolutely no risk to the principal you put on deposit. As a BCFSA authorized credit union, all deposits with BlueShore are fully protected by the Credit Union Deposit Insurance Corporation of British Columbia (CUDIC) – meaning that you receive 100% deposit protection. Learn more about the accounts and deposits protected by this guarantee.

Is a term deposit right for you?

Whether you are looking for a safe place to hold your money or to take advantage of a special term offer with a strong growth rate, a term deposit might be an ideal place to keep your money. With their flexibility, diversity, security and 100% deposit guarantee^‡, term deposits are a great option to consider. Explore current rates for all our term deposits or speak to an advisor or associate today to learn more about your options for term deposits.