What is a Term Trust?

Trust deposits are funds that are managed by trust institutions for specific purposes in accordance with the requirements of their clients, and are an important source of funds for the trust institutions' business operations. Compared with general bank deposits, trust deposits have the characteristics of longer deposit periods, larger amounts, higher interest rates, certain use restrictions, and inability to withdraw principal at will. According to different purposes, trust deposits include entrusted loan deposits, entrusted investment deposits, unit trust deposits, charitable fund trust deposits, labor insurance fund trust deposits, and individual special trust deposits.

Trust deposit

Trust deposits are generally divided into two categories: ordinary trust deposits and

First, the deposit subject is different. According to Article 15 of the "Interim Regulations on the Management of Financial Trust and Investment Institutions", which came into effect on April 26, 1986, the departments that can make trust deposits can only be financial departments, enterprise competent departments, labor insurance institutions, scientific research units and various Institutes and foundations; there is no such restriction when making general deposits, that is, businesses, institutions, groups and individuals can.

two,

I. Trust deposit term

Disputes on the right to retrieve deposits in trust

On May 30, 1995, Zhongshan Jiafa Power Co., Ltd. (hereinafter referred to as Jiafa Company) borrowed USD 60 million from France Industrial Asia Limited (hereinafter referred to as Industrial Company). In order to ensure repayment, Jiaming Power Co., Ltd. signed a trust deposit contract with Guangdong SDIC. Jiaming Power Co., Ltd. will deposit USD 42,857144 into Guangdong SDIC, with a term from April 20, 1998 to June 22, 2000, with an annual interest rate of 8. 25% in five installments. This deposit is used to pay the principal and interest of the loan owed by Jiafa Company to Xingye Company. The depositor is limited to withdrawing money on the date of the agreed withdrawal and entrusting the trustee to transfer it to the account designated by Xingye Company. Guangdong SDIC paid US $ 85,71428 and interest to the designated account according to the agreement. After Guangdong SDIC closed its liquidation, the remaining principal of 34,572,716 USD was not paid. When Guangdong SDIC entered bankruptcy proceedings, Jiaming Company declared bankruptcy claims in accordance with the law and did not apply for the exercise of its right of recovery. During the bankruptcy and liquidation process of Guangdong SDIC, Jiaming Company believed that the trust deposit was trust property and requested to recover more than USD 34.28 million of the principal of the trust deposit and its interest. The Guangdong Higher Court held that the trust property is the property that the client transfers its property rights to the trustee and is managed and disposed of by the trustee. The trust property is independent and the benefits and risks arising from the trust property are borne by the beneficiary. However, the contract between Guangdong SDIC and Jiaming Company clearly stipulates the deposit amount, term and interest rate. After the deposit expires, the principal and interest can be retrieved, which has the characteristics of a deposit contract. What the two parties set up is a deposit relationship, not a trust relationship. Guangdong SDIC has paid US $ 85,714,28 in accordance with the entrusted payment agreement of the trust deposit contract. The remaining deposit does not belong to the trust property, and Jiaming Company does not have the right to retrieve it. The Guangdong High Court ruled that Jiaming Company could not exercise the right to retrieve the principal of the trust deposit of USD 34,285,716 and its interest. Jiaming Company, as the bankruptcy creditor, shall be equally compensated in proportion.