Time deposits require the depositor to keep the money at the bank for a certain amount of time or else lose interest. They are therefore not as liquid as checking deposits, but it is normally possible to withdraw funds from them.

Question

Quizplus · Accepted Answer

Time deposits, also known as CDs or certificates of deposit, do require the depositor to keep the money at the bank for a certain amount of time, but it is still possible to withdraw funds from them before the maturity date, albeit with a penalty fee. This means they are not as liquid as checking deposits but not completely illiquid either.

Time Deposits Require the Depositor to Keep the Money at the Bank