Time deposit agreements may include a tacit renewal or rollover option. If so, the agreement has to define the specific conditions under which the deposit will be rolled over.

If the deposit has an automatic rollover feature, it is essential that the parties’ notice periods when the deposit matures and to cancel automatic renewal be clearly defined. The agreement must also clearly state how notice of non-renewal is to be given and any new terms and conditions applicable to the renewed deposit.

Note that banks’ pre-contractual information must clearly and expressly state if the deposit will be automatically rolled over at maturity, and, if so, for how long (i.e. for the same or a different term) and any other conditions that may apply after the rollover.

When a deposit has an automatic rollover feature, the applicable conditions and way in which customers are to give their consent must be stated. The conditions applicable after rollover, or the mechanisms for determining the conditions, must also be stated. The bank must inform customers of the exact terms of the rollover with reasonable advance notice, or on the date of the renewal if it is reversible.


Important: Watch out for the deposit maturity date so you can decide whether or not to roll the deposit over.

When a deposit is renewed tacitly or automatically, the interest rate offered may well be lower than that on the initial deposit.


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