{"id":7288,"date":"2019-09-04T09:00:34","date_gmt":"2019-09-04T09:00:34","guid":{"rendered":"http:\/\/213.146.202.110\/?p=7288"},"modified":"2026-08-11T10:33:32","modified_gmt":"2026-08-11T10:33:32","slug":"guide-to-analysing-a-term-deposit","status":"publish","type":"post","link":"https:\/\/www.finantia.com\/en\/2019\/09\/04\/guide-to-analysing-a-term-deposit\/","title":{"rendered":"Guide to analysing a Term Deposit"},"content":{"rendered":"

Term deposits are a good solution for those looking to start saving without taking on significant risks.<\/p>\n

In this article, written in partnership with the free financial product comparison platform ComparaJ\u00e1.pt<\/a>, we outline some characteristics associated with term deposits beyond yield that should be taken into account when analysing them, in order to choose the term deposit option best suited to your objectives and investment time horizon.<\/p>\n

Subscription amount<\/strong><\/h2>\n

You should take into account the minimum and maximum amounts defined for each deposit and check whether the amount you are willing to invest falls within those parameters. It should be noted that the higher the amount deposited when setting up this product, the higher the return obtained will be. <\/p>\n

 <\/p>\n

Term<\/strong><\/h2>\n

Deposits may have different maturities (usually 6, 12, 24 or 36 months), which correspond to the period during which the deposited amount earns interest. The longer the term of the deposit, the higher the amount resulting from the calculation of the accrued interest. Reflect and choose the deposit whose term best suits your needs. <\/p>\n

 <\/p>\n

Early withdrawals<\/strong><\/h2>\n

Suppose that, due to an unforeseen situation, you need to withdraw your deposit early, either partially or in full. Check whether the deposit you intend to set up allows funds to be withdrawn before its maturity date and, if so, under what conditions, whether there are contractually predefined dates for doing so, and any associated penalties. <\/p>\n

Early redemption may result in the application of penalties on the interest corresponding to the amount withdrawn.<\/p>\n

 <\/p>\n

Top-ups<\/strong><\/h2>\n

Some term deposits allow capital top-ups during the term of the contract, thereby increasing the amount invested. These additional contributions may be made on a one-off or periodic basis, by agreement between the parties. <\/p>\n

If the deposit in question allows top-ups, check with the Bank the applicable frequency and the minimum and maximum amounts defined.<\/p>\n

 <\/p>\n

Renewals<\/strong><\/h2>\n

Some term deposits are not automatically renewable and, should you wish to subscribe to this product again, you should contact your account manager to learn about the contractual conditions in force on the date the new deposit is set up.<\/p>\n

Other term deposits are automatically renewed on their maturity date for an equal period and in accordance with the initially agreed conditions, unless the client indicates otherwise.<\/p>\n

 <\/p>\n

Interest rates<\/strong><\/h2>\n

The remuneration of a term deposit\u2014interest\u2014depends on the interest rate applied by the credit institution to that deposit, the amount invested, the deposit term and the tax rate applicable to the interest paid by the institution.<\/p>\n

The Gross Nominal Annual Rate (GNAR) reflects the interest rate before tax, while the Net Nominal Annual Rate (NNAR) indicates how much you will actually receive after the withholding of income tax.<\/p>\n

Interest earned on term deposits is considered investment income and is subject to withholding tax at source, with a final withholding nature for IRS purposes and treated as a payment on account for IRC purposes. Accordingly, interest is subject to taxation at a rate of 28% for individual clients resident in mainland Portugal and Madeira, 22.4% for residents in the Azores, 25% for companies based in mainland Portugal or Madeira, and 20% for companies based in the Azores. <\/p>\n

 <\/p>\n

Interest Payment<\/strong><\/h2>\n

Payment of interest is made by crediting the associated demand deposit account. The value date for the credit to the demand deposit account is the deposit\u2019s maturity date. <\/p>\n

Some term deposits allow for interest capitalisation, either automatically or at the client\u2019s initiative. This means that the interest earned in each period is added to the initial principal, forming a new (larger) principal that will also earn interest (compound interest). <\/p>\n

Another aspect that may vary depending on the term deposit to be contracted is the interest payment date, which may occur only at the end of the term or on a periodic basis, if previously agreed between the parties.<\/p>\n

 <\/p>\n

Foreign currency deposits<\/strong><\/h2>\n

Some deposits may be made in a currency other than the euro. In such cases, the amounts deposited are guaranteed only in the foreign currency, meaning that if the foreign currency depreciates between the time the term deposit is set up and its maturity, the client may incur losses when converting the deposited amount into euros. However, the opposite may also occur: if the foreign currency appreciates against the euro, the client may obtain a return higher than initially projected. <\/p>\n

 <\/p>\n

Access conditions<\/strong><\/h2>\n

Term deposits may be available to the general public or to a specific target group (such as new clients or new funds). It is common to find term deposits that are exclusive to certain types of clients, generally offering more favourable conditions. <\/p>\n

 <\/p>\n

Deposit Guarantee Fund<\/strong><\/h2>\n

The Deposit Guarantee Fund guarantees the reimbursement of deposits held with participating credit institutions in the event that deposits become unavailable at any of those institutions.<\/p>\n

The Deposit Guarantee Fund guarantees reimbursement of the total aggregate amount of cash balances held by each depositor, per participating credit institution, up to a limit of \u20ac100,000.00.<\/p>\n

Currently, the Deposit Guarantee Fund has a maximum period of 15 business days, counted from the date on which deposits become unavailable, to reimburse depositors covered by the guarantee. However, with a view to optimising its reimbursement methods and making them more efficient, the maximum time limits for deposit reimbursement by the have been progressively shortened. <\/p>\n

Information on the guarantee provided by the DGF should be included in the Standardised Information Sheet relating to your deposit and in the Depositor Information Form provided at the time the deposit is contracted.<\/p>\n

For more information about the Deposit Guarantee Fund, please visit www.fgd.pt<\/a>.<\/p>\n

 <\/p>\n

Where can you find all this information?<\/strong><\/h2>\n

 <\/p>\n

In the Standard Term Sheet, you can find all the characteristics of a deposit before setting it up. Please note that access to pre-contractual information is a consumer right. Before entering into the contract, you should carefully read the legal documentation to ensure a duly informed decision when choosing a product that meets your needs. <\/p>\n","protected":false},"excerpt":{"rendered":"

Term deposits are a good solution for those looking to start saving without taking on significant risks. In this article, written in partnership with the free financial product comparison platform ComparaJ\u00e1.pt, we outline some characteristics associated with term deposits beyond yield that should be taken into account when analysing them, in order to choose the […]<\/p>\n","protected":false},"author":7,"featured_media":7272,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[93],"tags":[91,99],"class_list":["post-7288","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-articles","tag-financial-literacy","tag-term-deposits"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.finantia.com\/en\/wp-json\/wp\/v2\/posts\/7288","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.finantia.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.finantia.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.finantia.com\/en\/wp-json\/wp\/v2\/users\/7"}],"replies":[{"embeddable":true,"href":"https:\/\/www.finantia.com\/en\/wp-json\/wp\/v2\/comments?post=7288"}],"version-history":[{"count":1,"href":"https:\/\/www.finantia.com\/en\/wp-json\/wp\/v2\/posts\/7288\/revisions"}],"predecessor-version":[{"id":11448,"href":"https:\/\/www.finantia.com\/en\/wp-json\/wp\/v2\/posts\/7288\/revisions\/11448"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.finantia.com\/en\/wp-json\/wp\/v2\/media\/7272"}],"wp:attachment":[{"href":"https:\/\/www.finantia.com\/en\/wp-json\/wp\/v2\/media?parent=7288"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.finantia.com\/en\/wp-json\/wp\/v2\/categories?post=7288"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.finantia.com\/en\/wp-json\/wp\/v2\/tags?post=7288"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}