ÃÛ¶¹ÊÓƵ

Fixed-term deposits are among the most secure and easy-to-manage forms of investment. This is because all the conditions are already defined at the start: investors pay a fixed amount and receive a fixed interest rate for a fixed term.

In contrast to many other types of investments, you don’t have to worry about falling interest rates or fluctuating returns with fixed-term deposits. This is also what distinguishes fixed-term deposits from call money. However, unlike call money or a savings account, it’s not possible to access the one-time amount invested before the agreed term expires. Withdrawing the funds early is only possible in accepted exceptional cases – if at all. You’ll often be charged a fee for this and you’ll miss out on outstanding interest payments. In other words, fixed-term deposits are only suitable if you are certain that you will not need the invested funds for a specific period.

Fixed-term deposits are particularly popular with investors who can spare part of their money for a certain amount of time to invest it at low risk. The interest accrued contributes to the continuous accumulation of wealth and offsets, at least in part, any possible devaluation of the capital due to inflation. What’s more, experts consider fixed-term deposits to be low-maintenance investments. This is because, once it has been set up, this type of investment doesn’t require further attention until the payout is due. There is no notice period.

Once the conditions of fixed-term deposits have been defined, it’s practically impossible to change them. This makes this type of investment particularly appealing for short- and medium-term savings goals. Many banks therefore offer terms ranging from one month to one year. The interest rate depends on the current market interest rate, the term and the investment currency, and is calculated on an individual basis. Some fixed-term deposit accounts offer the option of early termination, but this is often associated with lost interest. Make sure you read the terms and conditions carefully.

You should also find out whether there is a minimum term or limits on how much or how little you can invest. It can generally be said that the minimum term is often shorter the more you invest. At ÃÛ¶¹ÊÓƵ, for example, you can invest for a minimum term of three months with an investment amount starting from CHF 25,000.

Investors who choose fixed-term deposits as an investment opportunity are opting for a comparatively secure and easy-to-manage form of investment. However, fixed-term deposits also have disadvantages due to their fixed conditions.

You can also invest with a bank in the form of a savings account. Here too, you earn interest on your deposits and the term is freely selectable. Despite some similarities, a savings account and a fixed-term deposit account are hardly comparable. This applies especially with regard to the interest paid on the amount deposited. For longer terms, interest rates for fixed-term deposits are usually higher than those for savings accounts. While the interest rates on savings accounts are also based on current market interest rates, they are adjusted regularly. This means that, at the beginning of the investment period, you don’t yet know how much interest you will receive at the end. Fixed-term deposits therefore offer significantly more planning reliability than savings accounts.

Fixed-term deposits are a relatively secure type of investment. Only solvency issues experienced by your financial institution can put this security at risk. In this case, however, assets of up to CHF 100,000 are covered by deposit protection. This applies to all banks that operate in Switzerland and are regulated by the Financial Market Supervisory Authority (FINMA).

The purpose of deposit protection is to safeguard clients’ assets in the event that their bank goes bankrupt. If this is the case, you are entitled to CHF 100,000 of your assets. It’s important to know that this limit of CHF 100,000 applies to all your accounts. In other words, if bankruptcy occurs, all your accounts will be added together and the deposit protection will be applied to this total amount. Deposit protection extends to all clients of a bank in general – this includes individuals as well as legal entities such as corporations and associations or communities of persons (for example, communities of heirs or co-ownership communities).

Fixed-term deposits are suitable for individuals who want to invest a certain amount of money over a specific period, for example, to avoid interest rate fluctuations. And if market conditions are favorable, it’s even possible to generate additional gains with fixed-term deposits. If you want to take advantage of fixed-term deposits, you can quickly and easily arrange a consultation with your bank, where you can also find out what the estimated interest rates are.