Term deposits often come under a lot scrutiny. People often ask us, “Why would anyone invest in a product that's barely higher than the 2.00% inflation rate?” If your long-term investment strategy is entirely dependent on term deposits then your gains, though guaranteed, will certainly seem hardly worth it at all.
But term deposits have other benefits that make them worthwhile. They will generally give you a better rate of return than a typical savings account and a significantly better rate than a chequing account (or your mattress). This makes a term deposit a really great option for parking money for your emergency fund or a vacation in the next couple of years.