määräaikaistilit

Määräaikaistilit, often translated as fixed-term deposits or certificates of deposit in English, are a type of savings account offered by financial institutions. In these accounts, a sum of money is deposited for a predetermined period, known as the term. During this term, the deposited funds are typically inaccessible without incurring penalties. In return for this commitment, the financial institution usually offers a higher interest rate compared to standard savings accounts.

The interest rates on määräaikaistilit can be fixed for the entire term, or they can be variable, depending on the specific product. The length of the term can vary significantly, ranging from a few months to several years. When the term of the deposit matures, the account holder can withdraw the principal amount along with the accrued interest. Alternatively, many institutions allow for the renewal of the deposit, often at the prevailing interest rates at that time.

These accounts are considered a relatively safe investment option as they are typically protected by deposit insurance schemes up to a certain limit, providing security to the depositor's funds. However, the main drawback is the illiquidity of the funds during the fixed term. If funds are needed before the maturity date, early withdrawal penalties can significantly reduce the earned interest or even deplete the principal in some cases. Määräaikaistilit are often chosen by individuals who have a specific savings goal and do not anticipate needing access to the funds before the term ends, seeking a secure way to earn a predictable return on their savings.