Savings accounts with major banks are one of the most common and least risky ways to store your money for the short term. Credit unions and building societies also offer savings accounts. When you deposit money in an account you are lending it to the bank, which pays you some interest in return. The interest you can earn is relatively low, so savings accounts are not the best option if you are looking for long-term growth.
Like savings accounts, term deposits also pay interest. The difference is that you agree to lend your money to the bank for a fixed period of time such as 6 or 12 months in return for a higher rate of interest. Sometimes you can’t withdraw the money during the term of the investment. In other cases you can, but get paid a lower rate of interest. Term deposits are sometimes called ‘fixed interest’ investments.