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Short term fixed deposit accounts – the pros and cons

By Ingrid Micallef – Head Products & Marketing Malta at MeDirect Malta.

Article published on The Malta Business Weekly.

Making the most of our money is always a challenge. Finding the right balance between covering our daily expenses, setting aside some funds for the unexpected, and planning for a secure long-term future is not an easy trick to pull off. One financial product that can play a role in making your money grow, without having to invest in more volatile stock markets or lock your funds away for years is a short term fixed deposit account.

The pros of short term fixed deposits

There are plenty of advantages to using short term fixed deposits. Essentially, you have an opportunity to place your money in an account where your funds are secure and protected while earning a guaranteed interest rate. The fact that these accounts have a short term, often three or six months, means that you do not have a long term commitment. So, even if it’s just a question of making sure you keep some money aside for the summer holidays, Christmas shopping, or an upcoming family occasion, you can do so and earn some extra cash until the day comes.

What’s even better about short term fixed deposits is that in recent years interest rates have once again started to increase. This is great news for savers, particularly those who open short term deposit accounts, as these frequently attract the highest interest rates of all. A clear example of this is the 3.6 per cent per annum MeDirect is currently offering on a 6-month euro denominated fixed term deposit.

Another key advantage to opening a short term fixed deposit is that, at least in MeDirect’s case, these accounts are free to open and do not attract any management fees.

What about the cons?

Apart from the fact that you will not have access to your funds for the duration of the term, however brief that time period might be, there is a potential downside that comes with the stability and safety of any fixed term deposit. This downside is the fact that you could potentially be losing out on bigger gains in more volatile assets. For example, if you had bought Invidia stocks at the start of 2024 instead of opening a 3-month fixed term deposit, you would clearly have made a lot more money. Of course, the exact opposite would apply if you had bought Boeing. So, in the end, it all depends on what level of risk you are comfortable with.

If you would like to learn more about MeDirect’s savings products, visit https://www.medirect.com.mt/save/. You can become a MeDirect customer online by visiting https://onboarding.medirect.com.mt/start.

MeDirect Bank (Malta) plc is licensed to undertake the business of banking in terms of the Banking Act (Cap. 371). The Bank is a participant in the Depositor Compensation Scheme established under the laws of Malta. Rate quoted is gross of tax on a per annum basis. Interest is paid into a savings account. Accounts can be opened with a minimum of €100 and deposit must be kept in the account for the duration of the term. Terms and Conditions apply and are available upon request. 

Join MeDirect today to access the tools you need to put your money to work on your own terms.

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We strive to ensure a streamlined account opening process, via a structured and clear set of requirements and personalised assistance during the initial communication stages. If you are interested in opening a corporate account with MeDirect, please complete an Account Opening Information Questionnaire and send it to corporate@medirect.com.mt.

For a comprehensive list of documentation required to open a corporate account please contact us by email at corporate@medirect.com.mt or by phone on (+356) 2557 4444.