Term Account (CAT)

Verified 04 June 2024 - Directorate for Legal and Administrative Information (Prime Minister)

Do you want to grow your savings without collecting them for a few months or for a few years? You can open a term account (CAT), also called term deposit. It's a savings account that allows you to have interest in return for the unavailability of the money that's put in for a certain period of time. We present the applicable rules.

The CAT is a poorly regulated savings product.

A lot of the rules that apply to the CAT are contractual freedom, which is the agreement you enter into with the bank.

The Term Account (ATC) is a blocked account.

You cannot make a withdrawal on the ATC for the period agreed upon at the time of opening the account. It can be understood between 1 month and 5 years.

The money deposited in the account becomes available only at the end of the blocking period.

The CAT can be subscribed for a fixed term or for a renewable term.

You can choose to open a CAT that is closed at the end of the hold period, or a CAT that is automatically extended for the same duration at the end of the hold period.

The CAT has various modes calculation of interest.

The interest rate on the CAT can be fixed, progressive or variable.

The contract shall specify the method of calculation used for each account.

The can be subscribed as a single account or in the form of a financial products association.

The bank may offer to take out 1 contract that covers a single term account, or several successive term accounts or 1 term account associated with other savings products (for example, 1 life insurance contract).

If the bank offers you a contract in the form of multiple futures accounts or a futures account associated with other savings products, it must give you a disclosure document that details the product's characteristics.

You can open an ATC at a bank or financial institution.

The bank has an obligation to explain the operation of the CAT to you beforehand.

The establishment must offer you a contract that you must sign.

The contract must inform you at least about the following:

  • Minimum Deposit Amount and Maximum Deposit Amount
  • Duration of the contract (single or renewable)
  • 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.

Please note

In the case of a floating rate CAT, the bank must provide you with a specific information document.

The interest on the futures account shall be calculated in accordance with the method laid down in the contract.

Fixed rate futures account

The rate of pay is fixed and guaranteed throughout the life of the account.

When you open the account, you pay the amount you want to invest, and you can no longer make any further payments afterwards.

The amount you have paid is frozen in the account for the period specified in the contract.

If the contract is concluded for a fixed term, the money deposited in the account becomes available at the end of the period provided in the counter, and the bank must pay you the interest at the same time as it repays the principal.

If the contract is concluded for a renewable period, it shall automatically recommence at the end of each period until the number of renewals provided for in the contract has been reached.

But you can ask that the contract not be renewed.

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 pay shall be indexed to a market rate or benchmark.

The bank must inform you periodically about the status of your investment.

If the contract is concluded for a renewable period, the bank must inform you of your right not to renew the contract.

You can recover the money placed before the due date, but in this case you have to pay penalties to the bank.

Penalties vary from bank to bank and must be set out in the contract.

Interest earned on the futures contract is taxable to income tax and social security contributions.

You have to report them on your income tax return, in the category of income from movable capital.

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