FIxed term deposits are the financial products with the lowest risk and they are protected against the possible insolvency of a credit institution through the national Deposit Guarantee Scheme. According to current EU regulations, member states must establish a national Deposit Guarantee Scheme covering up to €100,000 per depositor and per bank, or the equivalent amount in the respective local currency.
If the deposit exceeds the maximum amount covered by the Deposit Guarantee Scheme, the exceeding amount is subject to a risk of insolvency on the part of the partner bank if the bank goes bankrupt.
There is no business risk as the interest payment is not subject to business growth as in the case of stock options.
Political risks, such as the restriction of free movement of capital, are controlled by the European Union.
As long as you invest in a term deposit in the same currency (e.g. EUR), there is no foreign currency risk. For term deposits made in foreign currency, there are some risks. It is in your own interest to bear in mind that deposits with investments made in foreign currencies may entail losses (exchange rate risks).
Other risks may arise from different legal and tax systems, as well as from using a different language.