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Why open a fixed-term account: let us grow your savings

Fixed-term accounts are popular investments, as they offer several advantages other forms of investments do not. Most of us want to save and fixed-term accounts offer us the opportunity to do so whilst also generating money from our savings.

Here is all you need to know about opening a fixed-term account.

What is a fixed-term account?

A fixed-term account is a cash investment made at a financial institution such as a bank. Your money is invested for a set interest rate over a fixed amount of time, or term. When you invest your money in a fixed-term account you understand that your money is there for a set period of time, usually between one to five years and that the interest rate will not change over this period of time. You usually can only withdraw your money once the term is up.

Why get a fixed-term account?

There are a number of advantages to getting a fixed-term account. Here are the five top reasons why you should save your money in a fixed-term deposit account:

  1. It’s simple

    Contrary to many financial products, a fixed-term account is easy to understand. It is also easy to operate. Once you’ve set up your account there’s nothing to do until it’s maturity.

  2. It’s low risk

    With a fixed rate of interest, there is little to no chance of losing your money so if you are a cautious saver, this is the investment for you.

  3. Your money is locked away

    With a fixed-term account you can’t take your money out for an impulse buy so having your money locked away like this helps you from blowing your hard-earned cash on a boozy night out or a car you didn’t need and regretted buying later. The lack of flexibility helps you save your money.

  4. No hidden fees

    One of the great things about a fixed-term account is that there are no annual service or start-up fees.

  5. They are guaranteed by the government
  6. Your capital and your interest rate are guaranteed by MeDirect. Over and above, accounts are guaranteed up to €100,000 by the Malta Financial Services Authority (MFSA) under the Depositor Compensation Scheme.

Make an educated decision

It is also important to be aware of the downsides to a fixed-term account. Having done your research before will help you avoid unnecessary disappointments in the long run. Here are five cons to opening a fixed-term account:

  1. Your money isn’t accessible

    This is the fundamental principle on which a fixed-term account operates: once your money is locked away, you cannot touch it until the term ends.

  2. No extra deposits

    Just as you can’t take out money, you can’t add money to your fixed-term account. This might be a hassle if you’re a regular saver, but one way around it might be to open multiple fixed accounts with staggered maturity dates.

  3. Less flexibility

    While low risk is a good thing, the flip side to this is that it’s not a very flexible savings option as are, for instance, savings or notice accounts.

  4. You might regret your decision if rates increase

    If you open a savings or a notice account and market interests increase, then your savings account interest is also likely to increase. However, as the name implies, a fixed-term deposit account is fixed for both the term and the rate, and even if market rates go up, your interest rate on the account will remain at the original (lower) rate.

  5. Relatively low investment returns
  6. Fixed deposits almost always pay a higher interest than a regular, day-to-day savings account. However, because fixed deposits are very low risk investments, they offer lower returns relative to other investment options (e.g. mutual funds, shares, bonds etc).

Start saving now

If you’ve been thinking of investing your money, now is the time. It is easy to set up a savings account and by doing so you can make your money work for you without having to do anything. With an interest rate of 1% when locking your savings for one year, MeDirect makes it easy to start saving with as little as €100.

And to make it easier, MeDirect are giving you the facility of becoming a customer from the comfort of your home by completing a short questionnaire through our website when clicking Become a Customer.

Click here to find out more and to open a term deposit account online today. 


MeDirect Bank (Malta) plc, company registration number C34125, is licensed by the Malta Financial Services Authority under the Banking Act (Cap. 371). The Bank is a participant in the Depositor Compensation Scheme established under the Maltese laws. Rate quoted is gross of tax on a per annum basis. Interest is paid into a savings account. Terms and Conditions apply.

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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.