Three-year VS five-year fixed deposit

The three-year period is more suitable for the early accumulation of education funds. For example, the nine years from primary school to junior high school can be divided into three three years, and the expiration time of each period is stamped before a specific education expenditure. Five years is regularly suitable for large education expenditures at a defined point in time, such as high school and university after three years.

Five-year fixed deposits are more secure for pensions, as pensions are usually long-term idle funds. But if the configuration needs to be adjusted midway, the three-year periodicity is more flexible. The ideal solution is stratification: short-term spending in the near term, three years in the medium term, and five years in the long term.

The loss depends on the change in interest rates. If the interest rate has decreased when early withdrawal occurs, the loss is relatively small; if the interest rate has increased, the loss is significant. The opportunity cost of five-year fixed deposits is usually larger.