Time deposits with principal guaranteed: Opening. Prior information, signing and content of agreement

Do you have any money saved?  Do you want to get some return on it? One option is to open a time deposit.

What is it? A time deposit is a banking product allowing you to deposit your money with the bank for a fixed period of time, after which it is paid back with interest at the rate stated in the agreement. Many banks offer time deposits, with different characteristics. It is therefore very important that you are well informed before choosing one over another.

First, the bank must tell you what this banking product consists of, clarifying any doubts you may have. Before you deposit your money, you are entitled to receive from the bank, free of charge, the pre-contractual information you need to compare offers and make an informed decision.

This information must include at least the following:

• The term of the agreement (in the event of tacit renewal, the terms and conditions that would apply must be highlighted).

• All the fees or expenses that the bank may charge you, particularly the early cancellation fee or penalty. You should know that this penalty may not under any circumstances exceed the remuneration to which you are entitled until that date.

• The remuneration offered, and whether it is subject to taking out other services.

• The APR.

• The deposit guarantee scheme to which the bank belongs, indicating, when it is different from the one envisaged in Royal Decree-Law 16/2011, its translated name, address and website.

If you finally decide to open a time deposit, make sure that the conditions are the same as those in the pre-contractual information provided by the bank. Also, pay special attention to the way in which interest is paid, whether the term can be extended and, if so, under what conditions, and the bank’s rights and obligations concerning modification of the interest rate, if applicable. Lastly, remember that you are entitled to receive a copy of the agreement you have signed.