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 When a term deposit is account are opened, the lender/borrower understands that the money can only be withdrawn after the term has ended or by giving a predetermined number of days' notice.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