A CAT term account, also called DAT term deposit, is a savings account on which a blocked investment is made for a fixed and possibly renewable period. This type of account generally offers a relatively higher interest rate than other types of savings account. The rate is known when the account is opened.
The operation is rather simple. You put money in your account knowing that you won’t be able to get it back for a while. Your bank puts this investment on the interbank market at the Euribor rate. It thus offers you an interest rate slightly lower than that of Euribor to be able to make a margin. So everyone wins. Generally, the bank takes between 10 and 50 basis points in terms of interest, knowing that 100 basis points correspond to only 1% of margin.
Important to know, you cannot make several deposits on a term account. That is to say, only one fixed investment is made when the account is created and it cannot be modified.
Find out more: how the term account works
There are two types of CAT. If you choose a fixed rate term account, you will have a signed contract with the value of the remuneration which will not change.
On the other hand, a progressive rate account implies an increase in your interest in stages (monthly, quarterly). Indeed, the longer the duration of your investment, the more the rate increases. A rate scale is set up and fixed when the account is opened.
In the event of bankruptcy, any client who has made an investment of up to €100,000, all accounts combined, will benefit from a legal guarantee. This clause has existed since October 1, 2010.
In addition, unlike the livret A and the LDD which have a deposit limit, a CAT does not. Another advantage is that there are no management, account opening or closing fees.
The rate of remuneration varies according to several parameters: the amount paid, the duration of the investment, and the Euribor rate which depends on the money market. Each bank will offer a different rate. Without forgetting that the Euribor changes every day, it is for this reason that the rates are very scalable.
You can find offers with interest rates ranging from 0.20% to 2% on average. For example, some banks offer a CAT with a rate of 1.40% per year for 3 years, with a minimum authorized payment ranging between 1000 and 5000 €. There are also offers with rates of 0.40% to 0.85% for investments lasting 3 to 6 months. In general, the placement periods have a duration that varies between 1 month and 5 years.
Be careful, it is advisable not to commit to too long a period. However, it is obvious that the longer your investment remains blocked, the greater your profit will be.
To go further: other avenues of investment
You can terminate a CAT contract. On the other hand, the rate of remuneration will be lower than that expected if we had gone to the end of the contract. The rates, which depend on the duration of the investment, are defined (calculated) upstream. So before signing your contract, you will be aware of your gain depending on the duration of the blockage. By terminating your contract, you will be able to recover your money. However, there is a notice ranging from 1 to 32 days depending on the bank.
There are many advantages to saving on a CAT. If you are interested in the idea, you will nevertheless have to be careful to choose the type of investment best suited to your case. Indeed, an analysis of your financial situation in the short and medium term can help you know the amount you can deposit, the time during which your investment can remain blocked…