Investing in a term deposit involves limited risk to you, the customer. As is common for other deposit products, term deposits are secured against the folding of a credit institution by national deposit guarantee schemes.
If the term deposit exceeds the maximum amount covered by the deposit guarantee scheme, the amount exceeding the deposit guarantee scheme is subject to an insolvency risk if the bank goes bankrupt.
There is no business risk because the payment of interest is not tied to any business growth as is the case for shares.
Political risks, such as the restriction of free movement of capital, are limited within the particular country.
Further risks may arise due to different legal and tax systems, as well as when dealing in a different language.