Term Deposit Agreement Template for Saudi Arabia

The Term Deposit Agreement is essential for banks operating in Saudi Arabia to document fixed-term deposit arrangements with their customers. It is used when customers wish to place funds with a bank for a specified period in compliance with Islamic banking principles. The agreement covers key aspects including deposit amount, term duration, profit calculation methodology (avoiding conventional interest), and maturity arrangements. It ensures compliance with Saudi Central Bank (SAMA) regulations, Shariah requirements, and consumer protection principles. This document is crucial for both retail and corporate banking relationships, providing legal certainty and regulatory compliance while protecting both the bank's and customer's interests under Saudi Arabian law.

1. Parties: Identification of the Bank and the Customer, including full legal names and registration/identification details

2. Background: Brief context explaining the purpose of the agreement and the nature of term deposit services

3. Definitions: Key terms used throughout the agreement, including 'Term Deposit', 'Profit Rate', 'Maturity Date', etc.

4. Term Deposit Details: Specific details about the deposit, including amount, term, and profit calculation methodology in compliance with Shariah principles

5. Account Operation: Rules and procedures for operating the term deposit account, including deposit confirmation and maturity instructions

6. Profit Calculation and Distribution: Methodology for calculating and distributing profit in accordance with Islamic banking principles

7. Term and Maturity: Duration of the deposit, maturity conditions, and renewal options

8. Early Withdrawal: Conditions and consequences of early withdrawal, including any applicable reduction in profit

9. Rights and Obligations: Detailed responsibilities and rights of both the Bank and the Customer

10. Representations and Warranties: Standard declarations by both parties regarding their capacity and authority

11. Governing Law and Jurisdiction: Confirmation of Saudi law application and jurisdiction for disputes

12. Notices: Methods and requirements for formal communications between parties

13. Execution: Signature blocks and execution requirements