A quick summary on term deposits and their risks.

How does one invest in a term deposit?:

A person wishing to invest in a term deposit can do so easily, as banks offer term deposit investments. Different banks will have different ways of accepting term deposits, and these can be enquired about from a bank’s branch.  All a term deposit investment usually requires is an application form to check one’s financial history.

The risk assessment of term deposits:

Term deposits are generally not very risky, as one’s money is invested in a big company (the bank), which isn’t likely to shut down too soon. However, there still are risks when it comes to term deposits. They are:

Interest Rate Fluctuations (If the interest rate falls from 6% to 3% for example, then your received interest is cut in half)

Inflation Rates (Term deposits are still victims of inflation)

Tax (If earning an income from your interest, you will still have to pay income tax)