Pre-Encashable Deposit

A deposit made in a term deposit or CD that allows the account holder to withdraw funds without penalty to the principal. A pre-encashable deposit is a popular investment vehicle for individuals looking for full flexibility while saving in a guaranteed account.

Pre-encashables are available in a wide range of investment vehicles, including term deposits, GICs and CDs, all of which can be held in tax-deferred accounts. Although pre-encashables usually advertise withdrawals without penalty, most deposits require a certain minimum investment period before funds can be withdrawn without penalty to the principal.