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A deposit held at a financial institution that has a fixed term. These are generally short-term with maturities ranging anywhere from a month to a year. When a term deposit is account are opened, the lender/borrower understands that the money can only be withdrawn after the term has ended or by giving a predetermined number of days notice. |
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Inter-bank term deposits are considered as relatively safe investment and these are especially very appealing to conservative, low-risk investors who are expecting a adverse interest rate movement. |
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CBL has a strong presence in the inter-bank term deposits and Mudaraba Term deposits market. Due to our presence in both conventional banking and Shraiah banking CBL is one of the liquidity provider in the inter-bank Term deposit market. |
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Benefits |
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Due to its nature of fixed term, it minimizes interest rate risk during the tenor of the deposit. |
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Helps to manage Balance Sheet Gap. |
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Reduce too much dependency on call market thus helps to manage regulatory liquidity requirement. |
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Depending on the forward yield curve can be used to maximize returns on investment. |
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