Breaking the term deposit ahead of time. What threatens you?


A term deposit is an attractive way to multiply your savings. Its most important advantages are safety and convenience. When we put our money on it, we can be sure that they will be protected from loss. Term deposits are for a certain period of time, for example, 3, 6 or 12 months. But what if we want to break the deposit ahead of time?

When we have money, which we do not plan to spend in the near future, we can put it down on the bank deposit. We will use such products in most banks – currently also via the Internet.

Bank deposits are an attractive proposition for those who want to safely multiply their money. Although they do not pay well interest, which results from low-interest rates, money is not at risk of losing it, as is the case with investment funds or the stock market game.

Term deposit – how long should it be included?


Zerwanie lokaty terminowej przed czasem. Co ci grozi?


As we mentioned in the introduction, term deposits can be concluded for various periods – we meet with deposits for a period of one month, three months, six months, a year, and even lasting for several years. We can, therefore, decide whether we want to use a short-term deposit or we prefer long-term.

Generally, when there is a risk that the money will be needed quite quickly, we should choose a short-term deposit. In turn, when we know that we will not need cash, choose long-term products. We can also invest some of our money in short-term deposits, and some in long-term deposits. When it turns out that we will need cash, we can break one place out of a few.

It is also worth pointing out that the banks offer renewable deposits – in this case, the deposit is automatically renewed after the deadline. If we want to not give up, we must contact the bank before that date.

Breaking the deposit may mean a loss of interest

Let’s get to the point of breaking the deposit – it is possible at the request of the client, but it may be connected with the loss of our interest accrued for the period preceding the cancellation of the deposit. The bank may then retain all interest earned or unpaid yet or part of it, for example, 50% of the interest received so far.

Of course, it is best that the bank does not deprive us of the interest generated by the money. It happens that some banks really go out to customers and do not interest.

Therefore, we should carefully read the terms of our term deposit agreement to find out if and how much it will cost us to break before the deadline. We also have access to this type of information before signing the contract – most often we can also find them on the banks’ websites.

Therefore, when we want to store money on a deposit, remember that breaking it ahead of time may result in the loss of interest. Therefore, it is better to divide the sum into several smaller deposits, so as not to break one large one if necessary, but one that will allow us to get the sum we need.