Term Account (CAT)
Verified 22 January 2021 - Directorate for Legal and Administrative Information (Prime Minister)
A term account (or term deposit) is a savings account that offers a high interest rate provided that the deposits are frozen for a certain period of time. To open a CAT, you must sign a contract with the bank. The contract shall specify the duration of the investment, the operation of the account and the type of interest rate that applies. Interest paid on the futures account is subject to income tax and social security contributions.
A term account (ATC) is an account where the money you deposit is held for a certain period of time. On the other hand, you receive interest that is generally higher than that of the ordinary savings book.
The majority of CAT rules are contractual freedom, that is, the agreement you enter into with the bank (or financial institution).
The bank can offer you a wide variety of contracts, the main ones being:
- Fixed Rate CAT
- Progressive Rate CAT
- Variable Rate CAT
- Agreement to open multiple CATs with different operations
- Contract consisting of a CAT and other savings products
To open a CAT, you sign a contract with the bank.
She must explain to you beforehand how the CAT works.
In the case of a floating rate CAT, the bank must provide you with a specific information document.
The contract must inform you at least about the following:
- Minimum Deposit Amount and Maximum Deposit Amount
- Duration of contract
- Interest rate: How interest is calculated and when interest is paid (by periods or at maturity)
- Penalties for withdrawing funds before due date
- Terms of renewal of the contract at maturity
Single deposit blocked
When you open the account, you make a one-time payment and you can no longer make any additional payments. If you want to save extra money, you need to open another account.
The minimum and maximum amounts vary according to the banks.
Fixed or renewable term
The amounts you pay are frozen for a fixed period or for a renewable period.
The contract may not be concluded for a period of less than 1 month.
If the contract is concluded for a fixed period, it shall end at the end of the first period.
If the contract is concluded for a renewable period, it shall continue until the total period has been reached.
Availability of funds
If you want to recover the amount placed before the due date, you must pay penalties.
Penalties vary from bank to bank.
Fixed rate futures account
The rate of pay is fixed and guaranteed throughout the duration of the account.
Progressive Rate Futures Account
The rate of pay increases over time (for example, every quarter). The longer the money stays there, the higher the interest rate.
Floating rate futures account
The rate of remuneration is variable, indexed to a market rate or benchmark.
The bank informs you periodically about the status of your investment and the option of not renewing your contract.