If you’re interested in boosting your retirement savings, a term deposit might be just the ticket.

If you’ve never heard the phrase “term deposit” before, don’t worry — you’re not the only one. Term deposits are very similar to savings accounts, only you can’t access them before a certain amount of time has passed.

But why choose a term deposit for retirement savings over a traditional savings account? Let’s break it down:

The higher interest rates

Term deposits allow your money to do the work for you. They usually have much higher interest rates than typical savings accounts, meaning your retirement fund can grow faster. The more money you invest, and the longer you invest it, the higher the interest rate you’ll receive when you decide to empty the deposit. This is why they’re perfect for retirement — you can set aside a fixed amount for a long period of time, and use it during the retirement years when you’ll need it the most to pay for things like Home Care, health insurance, as well as any unexpected expenses that can crop up.

It’s cheap to start

You don’t need much to start your own term deposit. Depending on your bank, a term deposit usually only requires a minimum balance of $500 or so. Plus, there are no fees to eat into your savings — your total amount can only grow with time.

It’s flexible

The point of the term deposit is simple: Once money is deposited into the account, it’s meant to remain there, totally untouched, for the life of the term, where it can earn the highest possible interest. These high returns will most probably help you a lot in your old age. You might want to travel to a few countries with your spouse or support the education of your kids. These plans can use that high income from investments you made a long time back. Additionally, as you age, you might need a professional home caregiver (similar to the ones at this home healthcare Nashville care center) to help you with tasks like cooking, moving you around, or calling medical help if necessary. This might also require you to have a decent savings account. Whatever your goals might be, term deposits can help you reach them. You can open and access one whenever you want, and then you can choose to open the deposit for 6, 12, 18, 24 or 30 months, or go for 3, 4, or 5 years. You can even decide to have interest paid quarterly, biannually, annually or at maturity.

The low maintenance aspect

Setting up a term deposit is as easy as making a visit to your local bank branch. Once you’ve started the deposit, you don’t do anything until until the maturity date. No deposits, no withdrawals, no worries.  While you can’t technically access the money during the term, you do get a guaranteed return on your investment with a fixed rate. That means you don’t have to rely on a volatile stock market that can  cause fluctuation in traditional savings accounts.

To summarize, a term deposit lets you set aside funds for a set period of time, usually between six months and five years. In return, you receive a higher-dividends rate than with a traditional online savings account. The longer your term deposit, the more you earn. It’s a simple way to boost your savings and prepare for your financial future.