Below you can find some useful banking terminology related to deposit market. Get to know it to spot the differences between various banking products.

Product type

• Fixed-term deposit – is the most traditional and less flexible type of deposit. It rarely provides early withdrawal options before the deposit maturity.
• Notice account. Notice account is slightly different from the fixed term-deposit. It doesn’t have an exact maturity date specified at the initiation of the deposit. Instead of the maturity date, the notice period (for example 3 months) should be specified. In order to withdraw your money you have to give a notice to the bank. Then the money will be released by the bank after the notice period.
• Demand account is the type of interest paying accounts where you can withdraw cash and make additional deposits.
• Savings account is the type of interest paying accounts where you can withdraw cash and make additional deposits, but the best interest rate will be paid if you follow the account conditions (for example it can be paid to the minimum balance on the account during the year). This type of the accounts is popular in some jurisdictions because of the lower taxes then for the fixed-term deposits.
• Investment deposit are usually offered by the banks to the clients that buy some investment product from the bank. They often offer a better interest rate than regular fixed-term deposits. Pay attention to additional conditions of these deposits and the suitability of the offered investments.
• Subordinated deposits are not covered by deposit guarantee schemes. They are considered to be the riskiest among other deposits. In case of the bank failure, they are repaid after the rest of the liabilities right before the repayment to the shareholders. In case of deterioration of the bank’s financial stability interest accrual on these deposits can be stopped, and deposits can be converted to shares or terminated without repayment.

Product name is the name of the product given by the bank.

Gross interest rate is the nominal annual deposit interest rate before the taxation. Please note that the deposit effective rate may differ from the nominal interest rate depending on the interest payment or capitalization frequency.

Effective interest rate is the rate before the taxation taking into account the interest payment or capitalization frequency. The higher is interest payment or capitalization frequency the sooner you can get your interest and reinvest it. Effective interest rate takes into account the interest on interest or the reinvestment incomes.

Taxation rules can vary from country to country and from client to client. In our database, we provide the basic information about the product taxation. Please always check if these rules are the case for you.

Term is the term to maturity of the deposit. For notice accounts, the notice period term is given in our database.

Additional deposits possibility is a parameter that reflects the ability of the customer make additional deposits to the account.

Early termination and early partial withdrawal conditions reflect the possibility of the customer to withdraw funds from the deposit before the maturity partially or in full. Several options are possible:

• most fixed-term deposits don’t offer early withdrawal or early termination options. In this case, your ability to withdraw funds will be on the bank’s discretion and can’t be guaranteed.
• Some fixed-term deposit offer possible withdrawal or early termination. Sometimes the interest rate can be reduced to the amount withdrawn or to the whole amount of the deposit.
• Sometimes banks apply early withdrawal/termination fines to the customers. Please pay attention to these parameters when planning to open your deposit.

Interest payment frequency. Here are the following popular interest payment frequency options:

• Interest paid at maturity of the deposit. In this case, you will not receive your interest periodically and will be unable to use it before the deposit maturity.
• Interest paid periodically (annually/quarterly/monthly). In this case you’ll be able to use interest before the maturity of the deposit for your daily needs.
• Periodical interest capitalization. In this case, interest is periodically added to the deposit amount. In the next period after capitalization, interest will be accrued to the increased deposit size.
• Interest paid in advance. In this case, your interest is being paid at the deposit initiation. Please note that with equal gross interest rates the higher is the frequency of interest payment or capitalization – the higher is your income on the invested amount due to the reinvestment (or your ability to reinvest) this interest.